Manish Sisodia doesn’t see the economy recovering from the effects of demonetisation any time soon. Delhi’s Deputy Chief Minister, who also holds the portfolio of finance, says he is a worried man.

“You can’t run a country on fairy tales…this (demonetisation) has to stop, as it has created a fear in the market,” Sisodia told BusinessLine .

“This is not a one-month affair…we don’t have a magic wand…there is no recovery plan with the Centre. As the Finance Minister of a State, I am worried about it. This is not politics, as it is a strain on State finances,” he said, hitting out at the Narendra Modi government.

The AAP leader said there were concerns over revenue collections for the months of November and December, he said.

Sisodia termed the decision to demonetise high-value currency an economic disaster imposed by the government itself. He said State Finance Ministers, concerned at the implications of the decision on finances, had requested Union Finance Minster Arun Jaitley to discuss it at the recent GST Council meeting. “But, there was no sharing of information.”

“When the State government holds discussions with traders and other businesses in the run-up to the implementation of the GST, most of them say, first resolve demonetisation then talk about GST,” Sisodia said.

“During discussions, we found that if we go sector-wise, car sales and restaurant business have dropped. Garment industry is shaken. After November 10, they claim that business is now only 20–25 per cent [of the normal]. Even if I take a conservative view of the impact, a 50 per cent drop is evident,” he said.

“Our government projects are stranded. Labour has left (migrated). If tax collection is down 50 per cent, from where will we get money to run projects? How will we make payments?” he asks.

While reiterating his commitment to GST, Sisodia said, “GST says there will be compensation. The projected nominal growth rate of revenue subsumed for a State during the transition period shall be 14 per cent per annum, which seemed reasonable. But, it seems the economic conditions now created will have an impact for the next three-four years, which is dangerous. If this happens and you roll out GST from April 1, all States will go into losses.”

Sisodia said, “No numbers have been shared – no details available…windfall will be known only around December 30. We fear that lots of backdoor exchanges have happened and even fake currencies could have been deposited – in this rush it is difficult for banks to segregate.”

“Besides, let us not forget that banks, which are being made to hold public money in saving accounts, also have to pay interest,” said Sisodia, adding that “even bankers are crying”.

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