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Difficult to pin-point impact of note-ban on economy: Minister

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Press Trust of India New Delhi
Last Updated : Dec 22 2017 | 3:57 PM IST
It is difficult to pin-point the impact of demonetisation on the economy as growth depends on many factors, the government said today.
In a written reply to the Lok Sabha, Minister of State for Finance P Radhakrishnan said the rate of capital formation and savings, technology, infrastructure, resource allocation, policy framework and money supply are some of the key factors that impact the economy.
"It is difficult to pin-point impact of demonetisation on the economy via its impact on aforesaid factors," he added.
The minister was responding to a question whether the government had assessed the impact of demonetisation on fiscal and economic terms.
The Economic Survey 2016-17 had said that demonetisation had temporarily affected the real GDP (gross domestic product) and part of economic activity, he said.
"The real GDP growth has shown a revival in 2017-18 with second quarter registering a growth rate of 6.3 per cent from a growth rate of 5.7 per cent in first quarter," he said, adding, "Indian economy is not facing stagnation".

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Also, the second volume of the Economic Survey 2016-17 published in August 2017 assessed impact of demonetisation across some key sectors.
"It found that growth of taxpayers post demonetisation was significantly higher than in previous year. It was also found that there was a deceleration of house price inflation post demonetisation and a substantial increase in digitisation," Radhakrishnan said.
The government had scrapped the old Rs 500 and Rs 1,000 currency notes from circulation on November 8, 2016 giving reasons like curbing black money, checking terror financing and weeding out fake currency notes.
On digital payments, Radhakrishnan said there is a significant increase in average volume and value of payments made through cards in the post-demonetisation period.
However, he added, the average payment value per transaction for card has declined, implying that cards are being used for lower value transactions in recent period.
Besides, he said, mobile banking payments have also increased and the government has taken several initiatives including monetary incentive schemes.

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First Published: Dec 22 2017 | 3:56 PM IST

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