Digital payments will help lower fiscal deficit: Arun Jaitley

With the junking of the old high-value currency, the parallel economy has become part of the formal system, which leads to higher accountability and taxation that boost economic growth and transparency, he said at the launch of Digi Dhan Mela here.

He illustrated this point by saying that shifting towards less cash economy will help bridge fiscal deficit and bring about improvement in rural India. The government will pass on lesser burden to the posterity if the fiscal deficit is lower, he added.

At the same time, it will augment capability of administration, increase defence expenditure and improve spending on the poor. The government aims to bring down fiscal deficit to 3.99% of GDP this fiscal.

Anonymity of money is gone with demonetisation as the money has come into the banking framework and becomes part of the formal system leading to strengthening of banking, he said. The banks, in turn, can extend more loans and help build a better economy, Jaitley added.