New Delhi: Demonetisation of high-value currencies by the Indian government will have long-term benefits and complements the many initiatives taken by the government to fight against black money and reduce tax evasion, the Organisation for Economic Co-operation and Development (OECD) said on Tuesday.
In its Economic Survey for India released on Tuesday, OECD said implementing demonetisation will have a transitory impact with short-term costs. “The shift towards a less cash economy and formalisation should however improve the financing of the economy and availability of loans and should promote tax compliance,” the survey said.
The survey said the Indian economy is expanding at a fast pace boosting living standards and reducing poverty nationwide, but further reforms are now necessary to maintain strong growth.
The survey found that the acceleration of structural reforms and the move toward a rule-based macroeconomic policy framework are sustaining the country’s long-standing rapid economic expansion.
“India provides a welcome counter-point to a global economy that has been under-performing for years,” OECD secretary general Angel Gurría said. “Reforms are historic and are bearing fruit, growth is strong and other macroeconomic indicators are improving. Maintaining the reform momentum will be critical to boosting investment and creating quality jobs needed to ensure strong and inclusive growth for future generations, with all segments of society benefitting from it,” he added.
