Union Finance Minister Arun Jaitley said on Wednesday that the old currency notes of Rs 500 and Rs 1,000, which are no longer the legal tender, will be fully replaced with the new currency notes in the coming three-four weeks.
"In next three-four weeks, entire exchanged currency will be in the market. We will become a more tax-compliant society," Jaitley told DD News in an interview.
The currency notes of Rs 500 and Rs 1,000 denomination ceased to be legal tender from Tuesday midnight.
Jaitley said the bold move of the government will put an end to the parallel economy.
"Parallel economy has disadvantages. The government has taken a bold step to help country in the long run. If longer window was given, people would have found ways to evade tax," he said, adding that those who have legitimate money have nothing to worry about.
The move, which is expected to help the economy move towards a cashless society, will also lead to increased deposits in the banks and official transactions will get a boost, he said.
"Cash money supply will go down, obviously. In the long run, direct and indirect taxes both will be affected. Every state will benefit, the revenue kitty will increase," Jaitley said.
He warned that though there is no limit on depositing cash in the bank accounts, if the money is unaccounted, then law will take its course.
"It will have a positive effect on the Indian economy in the long run," he added.
Prime Minister Narendra Modi in a televised address to the nation on Tuesday evening said that all the Rs 500 and Rs 1,000 denomination notes can be deposited in banks and Post Offices between November 10 and December 30.
They can also be exchanged across bank counters by showing government-issued ID proof.