A joint study carried out by the Associated Chambers of Commerce & Industry of India (Assocham) and global advisory firm Ernst & Young (EY), stated that the government's demonetisation move has led to widespread adoption of online payment and is expected to have a positive long term impact on the economy through better tax compliance, increase in the tax to GDP ratio and higher tax collections. It also highlighted that improved governance, favourable conditions to conduct business, transparency in government procedures and responsive policy making with an immediate focus on effective implementation of reforms will continue to evolve India into a preferred destination for foreign investment.
The Assocham-EY study titled 'India: Transforming through radical reforms' noted that India is set on a growth trajectory that promises all-round development, economic welfare and strong macroeconomic indicators. All these radical reforms are acting as enablers for boosting the domestic environment which in turn is improving the country's stature globally. However, it said that the government needs to continuously invest in improving the ease of doing business environment, develop sound infrastructure and ensure availability of trained workforce.
As per the report, combining demonetisation with Digital India and Pradhan Mantri Jan Dhan Yojana will ensure transparency in financial transactions. It also said that the GST (goods and services tax) which is expected to be rolled out by July 2017, will further boost the economy by simplifying the indirect tax structure, and eliminating the cascading effect of taxes on customers and make doing business easier in the country. It added that the ceasing of major proportion of unaccounted currency would reduce the government liabilities and add to its finances. Besides, the surplus liquidity in the banking system will lower borrowing costs and increase the access to credit.