In a scathing attack on demonetization effect, former Prime Minister Manmohan Singh on Thursday said the “scars and wounds” it caused are getting more visible with time. Mr. Singh said the decision’s second anniversary is a day to remember how “economic misadventures” can shake the nation.
The veteran Congress leader asked the government to not resort to further unorthodox, short-term economic measures that can cause any more uncertainty in the economy.
“Notebandi impacted every single person, regardless of age, gender, religion, occupation or creed,” Singh said.
Describing demonetization as an “ill-fated” and “ill-thought” exercise, Mr. Singh said in a statement that the havoc it unleashed on the Indian economy and society is now evident to everyone.
In a hasty decision on November 8, 2016, Prime Minister Narendra Modi announced a ban on Rs 1,000 and Rs 500 denomination bank notes with immediate effect.
“It is often said that time is a great healer. But unfortunately, in the case of demonetization, the scars and wounds of demonetization are only getting more visible with time,” the former Prime Minister said.
Beyond the “steep drop” in headline GDP growth numbers after demonetization, the deeper ramifications of ‘note bandi’ are still unraveling, he added.
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Small and medium businesses that are the cornerstone of India’s economy are yet to recover from the demonetization shock, Singh asserted.
“This has had a direct impact on employment as the economy continues to struggle to create enough new jobs for our youth,” he said, adding that the financial markets are volatile as the liquidity crisis wrought by demonetization is taking its eventual toll on infrastructure lenders and non-bank financial services firms.
In his strong criticism of demonetization, he said the full impact of the demonetization exercise is yet to be understood and experienced. With a depreciating currency and rising global oil prices, macroeconomic headwinds are also starting to blow now.
“It is therefore prudent to not resort to further unorthodox, short-term economic measures that can cause any more uncertainty in the economy and financial markets”, Mr. Singh urged
“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,” he said.
The Congress has announced that it will hold a nationwide protest on Friday to mark the second anniversary of demonetization. It has also demanded that Prime Minister Narendra Modi should apologize to the people for “ruining and wrecking” the economy.