A major structural reform might cost a country a quarter or two of economic downturn, but shouldn't a country, on the cusp of modernisation, undertake it? Union minister of finance Arun Jaitley posed this question at India Today Conclave Next 2017 today, November 7 in New Delhi.
Speaking to India Today editorial director Raj Chengappa, Jaitley stressed that the structural changes demand technological innovation and a government willing to make the shift. In case of demonetisation, Jaitley said that note-bandi was part of steps that aspirational economies must take to break the status quo, and take the leap from developing to eventually becoming a less-cash, more formalised, developed economy.
As India readies for protests from Opposition to mark one year of demonetisation on November 8, the FM seemed convinced that the worst of "Demo" was behind us, and it's only now that the actual benefits of a more formalised economy, with diminished quantum of cash, and widened tax net, more bank accounts and substantially increased digital banking - would be felt.
Arun Jaitley said that Modi government made a rather nebulous Aadhaar draft legislation better by turning it into a law that envisioned its mammoth scope in delivering benefits, identifying the recipients and excluding those whose economic status don't make them deserving of state subsidies.
Jaitley said that Nandan Nilekani, the chief of the UIDAI, or the Unique Identity Authority of India, whose brainchild is Aadhaar, "gave a presentation" before PM Modi in 2014 that convinced many in the Union cabinet that Aadhaar had tremendous potential. Hence, the shift from earlier opposition to Aadhaar to embracing it wholeheartedly.
Linking Aadhaar to mobile, or other services, enabled quicker authentication and saved time, energy, improved efficiency, Jaitley asserted, and were particularly favoured by Arvind Subramaniam, the chief economic adviser. Privacy concerns had been flagged, and steps have been taken to address them, Jaitley said. Aadhaar is a boon, not a bane, he said.
On technology and governance
Union finance minister echoed Microsoft CEO Satya Nadella when he said how technology is a great enabler in making governance work for the people, making it more transparent and eliminating corruption to a large extent. Jaitley said data mining gives a more accurate picture of the issues at hand, and therefore distributing resources or doing governance electronically becomes easier.
On black money
Answering a question from India Today editor-in-chief Aroon Purie, on what steps the government is taking to curb the demand for black money, Jaitley said that reducing the cash component in the economy has crunched the scope to indulge in black money. Focus on financial technologies would make transparency a ubiquitous practice and in time even the demand for black money would come down.