Jaitley shares benefits of cashless economy with Bangladesh
Dhaka: Describing cash-centric economy as one of India's great challenges, its Finance Minister Arun Jaitley on Wednesday said the current Indian government is working to make India a less-cash market as it leads to corruption and hurts the poor.
"Cash leads to tax evasion, cash leads to shadow economy and cash leads to corruption," he said while addressing a 'talk' on 'Macroeconomic Initiatives of the Government of India' at a city hotel.
Jaitley said a large part of India's economy just thrived on cash and when it thrives on cash, the curse of cash also exists.
"One of the great challenges in Indian economy that we always faced was that it was cash-centric economy," said the Indian Minister adding that India is one of the fastest growing economies in the world over the last three years.
Therefore, he said, from the very first day in office, the government under Prime Minister Narendra Modi, initiatives were taken step by step to take India in the direction of making a less cash market.
He mentioned that they, in the year 2014, discovered that though India had a very large banking network, only about 58 percent of Indians or Indian families are connected to a banking system.
And some 42 percent of the total population was completely outside the financial inclusion, the minister added.
He said the current Indian government took the matter as the very first challenge before them and started working to take these unbanked people into the banking network.
Jaitley said these unbanked people are from "rural areas, tribal areas, in geographically more remote areas. There were people who came from parts of central India which were impacted by left-wing extremism."
He also said the officials started visiting every house, every family to bring unbanked people into the baking system that helped India open 300 million bank accounts in both rural and urban areas in three years.
The Indian minister said excessive cash operates against the poor and it deprives the state of revenue and overall economy.
In countries like India, he said they have seen lot of terror activities that thrived on cash and there have not much done in the past to address it.
Describing the reform in India, he said these reforms will allow India and its economy grow much faster and much greater way. "There is lot of room for improvement."
At the beginning, Jaitley said there is a very significant collaboration and understanding between Bangladesh and India. "Lots of our challenges are also common in nature."
Indian High Commissioner Harsh Vardhan Shringla said, "I'm sure the sharing of Indian experiences of the new initiatives for promoting a cashless economy would go a long way in fostering our economic engagement."
These initiatives which have been launched in India are aimed at promoting transparency and promoting ease of doing business and have a direct relevance to Bangladesh as well, he said.
The High Commission of India in association with the Policy Research Institute of Bangladesh arranged the talk.
Finance Minister AMA, PRI Chairman Zaidi Sattar were, among others, present.