Complete remonetisation in a month or two, says Arvind Subramanian

The Economic Survey presented by Finance Minister, Arun Jaitley, in the Parliament on Tuesday said that India has shown ‘robust macroeconomic stability’ in the year gone by despite demonetisation and the GST bill.

Holding the press conference on the presentation of the Economic Survey for the year 2015-16, CEA Arvind Subramanian said, “The Indian economy survived cash ban and the US presidential elections.”

Speculating further about money flowing back into the economy Subramanian said, “Complete remonetisation should take place within a month or two.”

Adding to the inferences on sustained growth the survey report said, “For 2017-18, it is expected that the growth would return to normal as the new currency notes in required quantities come back into circulation and as follow-up actions to demonetisation are taken. On balance, there is a likelihood that Indian economy may recover back to 6 ¾ per cent to 7 ½ per cent in 2017-18.”

Dissing the ratings agencies that downgraded India’s growth forecast and GDP outlook to below 6% Subramanian said, “Ratings agencies aren’t acting on India’s reforms and they have inconsistent standards.”

Commenting on the decision to demonetisation Subramanian said, “The aim of cash ban was partly to lower the increasing real estate prices.”

 “The impact of the currency squeeze was less severe than perceived,” Subramanian added.

On Union Budget expectations Subramanian said that the Universal Basic Income that many are speculating will be a part of the budget announcement tomorrow ‘needed more discussion.’

“The UBI would approximately cost 4-5% of India’s GDP,” Subramanian added.