Demonetisation will lead to less taxation, lower inflation: Piyush Goyal

NEW DELHI: Demonetisation will increase India’s tax base and prepare the ground for less taxation, lower inflation and a fall in interest rates, Piyush Goyal, minister for power, coal, renewable energy and mines said, defending the Centre’s decision to scrap high-value notes.

The government would like to charge lesser tax from the honest and extract much more from the dishonest, Goyal said in an interview with ET. He said the government will make sure rural areas get the cash they need, while people queuing up at ATMs should adopt electronic transfer of money. This will help India leapfrog in credit card adoption just like mobile phone usage raced ahead of landlines. Asked about prospects of relaxation in cash withdrawal limits, he said: “It’s an evolving situation. The lines have come down. Deposits are less than 50% than in the first day.” He said leaders opposing demonetisation are either feeling the pinch personally or want to support corruption and black money.