Manmohan Singh: Demonetisation scars more visible with time

With Bharatiya Janata party celebrating second demonetisation anniversary and Opposition marking it as black day, former premier Manmohan Singh stated that with time the scars and wounds of demonetisation are only getting more visible.

Expressing his opinion on Thursday, Singh said shared his scathing assessment of demonetisation and stated, “It is often said that time is a great healer. But unfortunately, in the case of demonetisation, the scars and wounds of demonetisation are only getting more visible with time.”

The economist said, “I urge the 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.”

Earlier, Union Finance Minister Arun Jaitley had called notes ban a ‘key step in a chain of important decisions taken by the government to formalize the economy’. He was of the opinion that due to the cash ban evasion of taxes was made more difficult, with helped in pushing digital transactions and improved tax collection.

However, Singh does not agree with Jaitley’s statements. He had said that the note ban was an ‘ill-fated and ill-thought exercise’ and ‘the havoc it unleashed on the Indian economy and society is now evident to everyone’. Singh said, “Beyond the steep drop in headline GDP growth numbers after demonetisation, the deeper ramifications of notebandi are still unraveling. Small and medium businesses that are the cornerstone of India’s economy are yet to recover from the demonetisation shock.”

Condemning the notes ban, Singh said, “This has had a direct impact on employment as the economy continues to struggle to create enough new jobs for our 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.”

It is to be known that on November 8, 2016, the Union government banned the old currency of Rs 500 and Rs 1,000, with immediate effect. Due to this, massive difficulties for the people of the country were created, with huge cash crunch an added adverse effect.

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