RBI Governor Urjit Patel says Demonetisation will transform Indian economy
Reserve Bank of India (RBI) Governor Urjit Patel on Thursday said that demonetisation will have a transformative effect on the economy going forward, despite some short-term disruptions and “public hardship”.
Patel was speaking on the eve of the deadline for citizens to deposit demonetised currency in banks. “The withdrawal of specified bank notes will impart far-reaching changes going forward. It is expected to significantly transform the domestic economy,” Patel in his foreword to the half-yearly Financial Stability Report.
The RBI Governor said the increasing adoption of digital modes of payments will lead to greater intermediation, efficiency gains, accountability and transparency.
He acknowledged that there have been short-term disruptions and hardship to the public because of the demonetisation of high-value currency.
On the domestic macroeconomic front, the condition will remain “stable” with a cool-down in inflation, the RBI Governor said, adding that the growth momentum has “slackened” recently.