Eliminating shadow economy to have positive impact on GDP: Arun Jaitley

NEW DELHI: Government’s measures to eliminate the shadow economy and tax evasion are expected to have a positive impact on the country’s gross domestic product and fiscal consolidation in the long run, finance minister Arun Jaitley said on Thursday.

The country appeared to be much better placed with improved macro-economic fundamentals, Jaitley said while chairing a meeting of the Financial Sector Development Council (FSDC) here.

The FSDC, which has all financial sector regulators as members, reviewed major issues and challenges facing the economy in its first meeting after the demonetisation of high-value currency notes from November 9, 2016.

RBI governor Urijit Patel, Sebi chief UK Sinha, IRDAI chairman TS Vijayan, PFRDA chairman Hemant G Contractor, chief economic advisor Arvind Subramanian and top officials of the finance ministry attended the FSDC meeting.

"World economy is quite fragile, yet India is much better placed today due to improvement in its macro-economic fundamentals," Jaitley said at the meeting.

The FSDC reviewed the status of non-performing assets (NPAs) of banks. The chief economic advisor also made a presentation on the state of the economy. "The council reviewed major issues and challenges facing the economy...," a statement from the finance ministry said.

Also, the regulators offered suggestions and proposals for the 2017-18 union budget, which the council deliberated upon. The budget is proposed to be presented on February 1.




"The council also reviewed the present status of NPAs in banks and measures taken by the government and RBI for dealing with stressed assets and discussed on further action in this regard," the statement said.

The FSDC discussed the initiatives taken by the government and regulators for promoting financial inclusion and financial literacy, the statement said. A report on the activities by a FSDC subcommittee chaired by the RBI governor was placed before the council. The council also reviewed action taken by members on decisions taken in earlier meetings.

"The council also discussed issues pertaining to fintech, digital innovations and cyber security. The council took note of the initiatives taken in this regard by the government and the regulators and discussed on further steps to be taken," the finance ministry statement said.