A day before taking charge as the vice-chairman of Niti Aayog, Rajiv Kumar took part in India Today's Editors Roundtable where he backed demonetisation and claimed that the move has broken the back of the black money market.
Here's what Rajiv Kumar, vice-chairman, Niti Aayog, said on the issue of demonetisation:
- I don't know how you quantify the pain because I have not yet seen anything firm about the pain. There are some conjectures about one per cent or half per cent drop in the Gross Domestic Product (GDP) but that's not the pain.
- As far as pain inflicted on common people, standing in queues goes. They have voted with their feet. They have supported the move through and through.
- Demonetisation was more than worthwhile economically. I always supported it even before all these numbers came out.
- It has helped to bring down inflation. It has curbed conspicuous consumption which is financed by the black income.
- It's just that black money that was there has now become white. It's all in the banks, informal incomes have been formalised.
- It has brought down the real estate, housing prices. Houses have become affordable for the neo-middle class.
- At least Rs 2.89 lakh crore deposited with the banks is not white as we understand. It's at least grey. It's there and now it's up to the CBDT and the tax department to get their act together to do what they've been claiming, big data analytics etc. The fact is this money is no more sloshing around in the economy and creating that kind of fizz we were used to.
- For the first time you've got an economy which is much more transparent.
- For the first time, you've got an economy which has got much greater transparency. Black (money) became grey and will become government's assets going forward.
- Yes, the RBI didn't get a windfall gain as was expected but the fact remains that this informal economy (black money) has shrunk.
- Since I have been in Delhi, I have stopped seeing people with illegal incomes strutting about the social evenings.
- People had estimated and I was one of them, that the amount of black cash floating around in an economy by any stretch of imagination was 10 per cent of the GDP or Rs 5.5 lakh crore of which Rs 3 lakh crore is now in these accounts under the sight of the government.
- We are an ingenious people, the Indians have gamed the system and therefore all the money that they had was not thrown on streets or burned in bonfires or washed down the Ganga. This all has been safely ensconced wherever.