Asserting that the Indian economy is "very stable" at the macro level, Chief Economic Advisor Arvind Subramanian on Thursday said managing demonetisation was a short-term challenge for the next few weeks and months."One of the challenges for the Indian economy in the short-term is to manage the demonetisation fall-out. How do we manage demonetisation in the next few weeks and months," Subramanian said at an Associated Chambers of Commerce and Industry of India (Assocham) interactive session here. "However, this would be a short-term phenomenon," he added.On the demand for lower Goods and Services Tax (GST) rates, Subramanian said lower and simpler taxes are always preferable.He also called for inclusion of real estate and electricity into the GST value chain.
Referring to some important global developments like the hike in the US Federal Reserve rates, he said the Indian economy was well-cushioned to cope with these events. "This was anticipated and expected. My own view is that the Indian economy is very well-cushioned to absorb the impact of this. The RBI policy also took account of this in a very sensible way. There may be some short-term things. This is not something we need to worry about," he added.On the outflows from the emerging markets, he said that after the US elections, there were big fund flows from the emerging markets. "But given that India is in bright spot, the impact on us would be much less," Subramanian said.