Indian economy yet to recover from demonetisation shock: Manmohan Singh

On the second anniversary of demonetisation of high value notes, former prime minister Manmohan Singh said the exercise was ill-fated and ill-thought. He said 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 noted economist added.

He added that the scars and 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 unravelling. Small and medium businesses that are the cornerstone of India’s economy are yet to recover from the demonetisation shock," his statement said.

Singh, who had termed the decision a loot, said it 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," he said.

The former prime minister said the full impact of demonetisation is yet to be understood and experienced. "With a depreciating currency and rising global oil prices, macro-economic headwinds are also starting to blow now," he said.

He urged 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 policymaking should be handled with thought and care," he said.

COMMENT NOW