Remonetisation to come more in lower denomination notes: Shaktikanta Das

The government is focusing on printing and supplying bank notes of Rs500 and other lower denominations in order to prevent accumulation of high value currency notes of Rs2,000, economic affairs secretary Shaktikanta Das has said.

Speaking at the Growth Net Summit in New Delhi on Tuesday, Das said, ''The approach which is now being followed is greater focus on manufacturing and supply of Rs500 and other lower denomination notes so that you have more Rs500 notes … the apprehension is being expressed that Rs2,000 notes would again lead to accumulation, (but) that should not happen.''

Since the 8 November recall of the old series Rs500 and Rs1,000 notes (which together accounted for 86 per cent of the money in circulation then) the Reserve Bank of India has adopted a faster remonetisation process, restoring the financial system back to normal.

While the aim of withdrawal of legal tender status of Rs500 and Rs1,000 notes was curbing of black money accumulation in higher denomination cash hoardings, the new Rs2,000 notes make it easier for cash hoarders.

Speaking on easing the FDI approval process, Das said the government will soon come out with a roadmap to further simplify the FDI approval process by abolishing the Foreign Investment Promotion Board (FIPB). ''The process of FDI approval is being simplified further by dismantling the FIPB and delegating the power to ministries or the regulators as the case may be …The necessary formal proposals will be considered by the government very shortly… the procedure which will be followed after dismantling FIPB will be announced… it's a matter of few weeks.''

Finance minister Arun Jaitley had in the budget speech last month announced the abolition of FIPB and form a new mechanism that could include approvals by the ministries concerned for expeditious clearance of foreign investment proposals.

''We have now reached a stage where FIPB can be phased out. We have therefore decided to abolish the FIPB in 2017-18. A roadmap for the same will be announced in the next few months. ''In the meantime, further liberalisation of FDI policy is under consideration and necessary announcements will be made in due course,'' Jaitley had said.

Das said that the online interface for FDI approval that is the portal of Foreign Investment Promotion Board (FIPB) will continue for greater transparency and speed. ''Who is going to control it who is going to take final decision that will be spelt out once the government takes the final decision.''

Terming India as one of the most open countries in the world in terms of FDI inflows, Das said, the government is committed to provide an overall macro economic and fiscal environment which is prudent and strong. ''Our macroeconomic fundamentals are quite strong, overall fisc also remains strong and the policy adopted are very prudent,'' he said.

Speaking on the FRBM Committee headed by N K Singh, Das said that several key recommendations have been factored into the Budget 2017-18 and the government is now examining other suggestions of the report. ''The committee has broadly said the fiscal deficit road map will have the debt to GDP as its principal anchor. So, we are targeting debt to GDP ratio of 60 per cent by 2023,'' he said.