Demonetisation is a good step amid implementation challenges but the government needs to plug the holes of farm income and real estate to get long-term benefit out of this major step, a global management strategy and innovation expert said today.
"Demonetisation is a good idea as it brings transparency and accountability which was missing in the economy for long. But, India needs to follow it up with formulating policies that will prevent accumulation of black money again. Otherwise in the next five years we will get back to the same," Vijay Govindarajan, professor at Dartmouth's Tuck School of Business and world's leading expert on strategy and innovation, told PTI in a brief interview.
Subsequent tax laws and monetary policies should supplement the good move (demoentisation), the author of 'The Three-Box Solution: A Strategy for Leading Innovation' said.
He said India should tax agri-income but did not comment on the rate of taxation which would plug the hole of black money getting accumulated again.
Currently, income from agriculture is not taxed in the country allowing parking of black money in form of agri income. Introduction of transperency is also needed in real estate, he said.
Asked how would he place demonetisation in his three box solution strategy, Govindarajan said, "It is enabler for box ... Which is about creating for future."
He said a business mind and a social heart is a combination which will define and determine whether and how Indian businesses will fare and thrive, he said at 'Thought Leadership Masterclass' organized by the CII-Suresh Neotia Centre of Excellence for Leadership.
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