New Delhi:
Ashima Goyal, a member of the RBI Monetary Policy Committee (MPC), has attributed the increase in tax collections to demonetization and said it will help the nation move towards the ideal situation where low taxes are levied on a large basis.
On November 8, 2016, Prime Minister Narendra Modi announced the demonetization of old Rs 1,000 and Rs 500 banknotes and one of the main objectives of the unprecedented decision was to curb black money flows and promote digital payments.
Noting that demonetization brings short-term costs, but also some long-term benefits, Ashima Goyal said it has improved digitization and formalization in the economy and reduced tax evasion, although all this has yet to go further.
“It has contributed to the high tax burden that the country is benefiting from today. This is helping us move towards the ideal of low tax rates on a large scale,” she told PTI.
The tax authorities said on 9 October that gross tax collection on corporate and individual income has so far increased by almost 24 percent in the current fiscal year to Rs 8.98 lakh crore.
GST collections remained above Rs 1.40 lakh crore for the seventh straight month in September, at Rs 1.47 lakh crore, up 26 percent from last year, reflecting strong tax collection growth.
Earlier this month, however, former Congress Speaker Rahul Gandhi said the BJP’s policies of demonetization, GST and agricultural laws are weapons targeting India’s poor and small businessmen.
In response to a question about the central bank’s digital currency (CBDC), Ashima Goyal said the goals of the CBDC are to reduce the use of cash and provide additional features to the existing payment system rather than replace it. .
“CBDC can certainly meet new needs in the digital age, reach remote areas and improve financial inclusion, and cut costs because cash is expensive and cumbersome,” she noted.
Recently, the Reserve Bank said it will soon begin the trial launch of the e-rupee for specific use cases with a view to strengthening India’s digital economy, making payment systems more efficient and monitoring money laundering.
In a concept note on digital currencies from the central bank, the RBI said that CBDC is intended to complement, rather than replace, current forms of money and that it is intended to provide users with an additional payment option, not existing ones. replace payment systems.
CBDC is a digital form of banknotes issued by a central bank. While most central banks around the world are investigating CBDC issuance, the main motivations for issuance are specific to each country’s unique requirements.
When asked about India’s widening trade deficit, Ashima Goyal said there are multiple policy levers available to reduce the deficit, including shorter-term measures, depreciating the exchange rate and reducing aggregate demand.
In her view, greater emphasis should be placed on longer-term sustainability-enhancing measures, such as reducing oil intensity and dependence on energy imports and boosting exports.
Ashima Goyal suggested that the best export incentives increase the competitiveness of Indian industry by reducing the costs and difficulties of doing business here.
India’s trade deficit rose to $26.72 billion in September, while exports shrank 3.52 percent to $32.62 billion.
(Except for the headline, this story has not been edited by DailyExpertNews staff and has been published from a syndicated feed.)