Demonetisation a courageous step, India holds adequate capacity to take note ban decision: Arun Jaitley

New Delhi: Finance Minister Arun Jaitley on Saturday hinted that not all of the Rs 15.44 lakh crore worth of currency junked will be remonetised through issuance of new notes as he said digital currency will fill the gap.

He added that India has capacity to take decision on demonetisation and it's no longer a fragile economy.

"One of the efforts of this exercise has to be that even though a reduced cash currency could remain, our conscious effort... (is) to supplement the rest with a digital currency," he said while addressing annual general meeting of industry chamber FICCI here.

Remonetisation will not take very long time and RBI will be able to complete it very soon, said Jaitley. 

Long-term benefits are very clear even if we have to bear short-term inconveniences, informed Finance Minister.

Talking on GST, Jaitley said ideally, goods and services tax should start from Apr 1, 2017 and constitutional necessity for new regime to come into force between Apr 1 and Sept 16.

"The 70-year normal had become a way of life for almost every Indian. It was not merely a fact that you had a lot more cash currency, far larger cash currency as part of your GDP... the economic and social consequences of that are extremely adverse."

He made a point that dealing in that cash currency had led to a lot of aberrations in terms of tax non-compliance, currency being used for collateral purposes like crime, escaping the tax net and not getting into the banking system. 

He also said that there is a certain increase in digital transactions post demonetisation.