Consultation paper on cryptocurrency soon: Economic Affairs Secretary Ajay Seth

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The Center is planning a new consultation paper on cryptocurrency soon, although legislation on digital assets is likely to take longer, Economic Affairs Secretary Ajay Seth said.

On the sidelines of a Finance Ministry event, the secretary also said that there was no case for a downward revision of the growth estimates. He said inflation should moderate soon and the government is ready for any shock.

Speaking about cryptocurrency, Economic Affairs Secretary Ajay Seth told reporters, “Our consultation paper is fairly ready. We have gone into a deep dive into this.”

The Economic Affairs Secretary said a law on cryptocurrencies may take some more time as India awaits an international framework on it and is closely engaging with the International Monetary Fund and the World Bank.

In December 2021, during the winter session of Parliament, the government listed the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, to provide a framework for digital currencies. Subsequently, in the 2022-23 budget, the government imposed a 30 per cent tax on gains from virtual digital assets, along with a 1 per cent tax at source on all such transactions. However, the Center clarified that taxation does not imply legal validity for cryptocurrencies.

Since then the government has called for a global framework to tax virtual digital assets. The Reserve Bank of India (RBI) has also opposed private digital currencies.

The latest consultation paper is expected to provide some clarity on the government’s stand and give direction to the industry, which is seeking clarity on crypto trading.

Recent measures by the government should calm inflation

Economic Affairs Secretary Ajay Seth on inflation said that recent measures by the government should calm inflation in the next few months, adding that it was a dynamic situation and the Center may take more measures if necessary.

“Prices of commodities have moderated from their peaks in May, and in the coming months, inflation should (also) be moderating,” Economic Affairs Secretary Ajay Seth said.

Ajay Seth said that while the recent steps of the government should control inflation in the next few months, it is a dynamic situation and the Center can take more measures if needed

RBI raised Repo-rate to 4.4% to control inflation

The Consumer Price Index (CPI) rose to an eight-year high of 7.79 per cent in April. RBI had earlier this month raised the repo rate by 0.4 percentage points to 4.4 per cent in the mid-cycle review. This was followed by cutting duties on petrol, diesel, edible oil and input materials for industries to reduce inflation.

The Economic Affairs Secretary Ajay Seth said there was no reason to revise its growth forecast below the current 7.5 per cent. “No rating agency is talking about numbers below 7.5 per cent, so there is no need for revision as of now.”