Manmohan Singh
Manmohan Singh

Demonetisation was ill-fated and ill-thought: Manmohan Singh

ANI | Updated: Nov 08, 2018 13:08 IST

New Delhi [India], Nov 8 (ANI): Former prime minister Manmohan Singh, on the second anniversary of demonetisation on Thursday, asserted that the exercise which the Prime Minister Narendra Modi-led government undertook in 2016 was ill-fated and ill-thought.
Underlining that the havoc unleashed on the Indian economy and society due to demonetisation was evident to all stratas of people, he said in a statement: "Today marks the second anniversary of the ill-fated and ill-thought demonetisation exercise that the Narendra Modi government undertook in 2016. The havoc that it unleashed on the Indian economy and society is now evident to everyone. Notebandi impacted every single person, regardless of age, gender, religion, occupation or creed."
The former prime minister further emphasised that the scars and wounds of demonetisation are only getting more visible with time. Singh added that the consequences of 'notebandi' are still unraveling.
"It is often said that time is a great healer. But unfortunately, the scars and the wounds of demonetisation are only getting more visible with time. Beyond the steep drop in headline GDP growth numbers after demonetisation, the deeper ramifications of notebandi are still unraveling."
Singh said that small and medium businesses that are the cornerstone of India's economy are yet to recover from the demonetisation shock, adding that the note ban has had a direct impact on employment as the economy continues to struggle to create enough new jobs for the youth.
"The financial markets are volatile as the liquidity crisis wrought by demonetisation is taking its eventual toll on infrastructure lenders and non-bank financial services firms. We are yet to understand and experience the full impact of the demonetisation exercise. With a depreciating currency and rising global oil prices, macro-economic headwinds are also starting to blow now," he stressed.
"It is therefore prudent not to resort to further unorthodox, short-term economic measures that can cause any more uncertainty in the economy and financial markets," he added.
Singh urged the central government to restore certainty and visibility in economic policies. "Today is a day to remember how economic misadventures can roil the nation for a long time and understand that economic policy making should be handled with thought and care," Singh underscored.
Posting a strong defence of demonetisation, Union Finance Minister Arun Jaitley said that the note ban had impacted in formalising the economy.
"As we complete two years of demonetisation today, it has been established that demonetisation, a key step in a chain of important decisions taken by the Government, had a huge impact in formalising the economy," Jaitley wrote in a blog.
"The Government first targeted the black money outside India. Asset holders were asked to bring it back on payment of penal tax, on failure to do so they are being prosecuted under the Black Money Act. All such details received have resulted in action against the violators," he added.
The Finance Minister said that the impact of demonetisation has been felt on collection of personal income tax.
"Its collections were higher in Financial Year 2018-19 (till 31-10-2018) compared to the previous year by 20.2%. Even in the corporate tax the collections are 19.5% higher," he said.
The Congress party is expected to observe a 'black day' today to mark the second anniversary of demonetisation, according to sources.
Last year, too, the Congress and other opposition parties protested at various places across the country against the central government's drive.
On November 8, 2016, the Centre had declared Rs 500 and Rs 1,000 notes as non-legal and introduced new Rs 500 and Rs 2,000 notes.
Since then, various opposition leaders have highly criticised the Centre's move, while the members of the Bharatiya Janata Party (BJP) and its allies have backed the decision. (ANI)