Having already dubbed demonetisation as a case of “monumental management failure”, former Prime Minister Manmohan Singh on Monday reiterated his criticism of the policy measure, saying it would have a “very significant adverse effect” on the country’s GDP and an issue in the upcoming Assembly elections in five States.
“I think this event is to focus on our Punjab manifesto. Nevertheless, you will see there will be a very significant adverse effect on the country’s GDP.”
Recalling his statement in Parliament that demonetisation would adversely affect the GDP, Singh said subsequent developments had proved him right. In this context, he referred to the recent projection by the National Income Unit of the Central Statistical Organisation that the GDP in 2016-17 will slow down to 7.1 per cent from 7.6 per cent a year earlier.
This, he said, had not accounted for demonetisation, which was announced by Prime Minister Narendra Modi in an unusual address to the nation on the night of November 8. Asked whether elections would be fought on the issue of demonetisation, he said, “It will be an issue.”
Singh has been highly critical of demonetisation decision and has predicted a 2 per cent drop in GDP due to it.
Speaking in the Rajya Sabha during a debate on the issue, Singh had castigated the government and Prime Minister over the note ban, saying its implementation was a “monumental management failure” and a case of “organised loot and legalised plunder”.
Writing in The Hindu , Singh was uncharacteristically searing in his critique of demonetisation: “It is heartbreaking to see and hear of millions of poor Indians standing in long lines to withdraw some money for basic sustenance. As someone who has experienced long lines for rationed food during war time, I never imagined that one day I would find my own countrymen and women waiting endlessly for rationed money. That all of this suffering is due to one hasty decision makes it even more disconcerting”.
“The macroeconomic impact of this decision of the government is likely to be hazardous. At a time when India’s trade numbers are at multi-year lows, industrial production is shrinking and job creation is anaemic, this policy can act as a negative shock to the economy.”