Former Prime Minister Manmohan Singh on Monday in an interview with the press over demonetization and GST said that “the impact of demonetization on the weaker sections of our society and business is far more damaging than any economic indicator can reveal.”
Prime Minister Narendra Modi, on 8 Nov 2016 at the strike of midnight had announced that the currency note of 1000 and 500 will no longer be legal in India. Following his announcement, India faced a lot many difficulties and it almost took 4-5 for the new currency notes of 2000 and 500 to come into rotation.
Congress party along with a few other opposition parties have decided to observe 8 Nov as the black day in India. The economist-politician Dr. Manmohan Singh on Tuesday morning reached the poll-bound Gujarat to touch upon various aspects related to note ban as well as the implementation of GST and its impact on the economy.
His visit comes just a day before the Congress Vice President Rahul Gandhi‘s likely visit to Surat to mark the first demonetization anniversary on 8 November as ‘Black Day’. The Gujarat Congress in its release had informed that the former Prime Minister, during his visit, is scheduled to hold an interactive session on the current state of the economy with businessmen and traders.
He also addressed the small traders and businessmen on Goods and Service Tax (GST) and other issues in Ahmedabad today and will also speak at a press conference at the Gujarat Pradesh Congress Committee office to boost the party’s prospects in the upcoming Gujarat elections.
While addressing the traders and businessmen in Ahmedabad on Tuesday morning, Manmohan Singh said that he was shocked to hear the announcement made by Prime Minister Narendra Modi on 8 Nov last year and was thinking who could have suggested him to take such a reckless step.
Addressing the gathering he said that “I say with immense pain and sense of deep responsibility, that the 8th of Nov was a black day for our economy and our democracy.” Agreeing that black money and taxation are two major problems that the country needs to tackle, but demonetization was clearly not the solution Singh said.
During his speech, he said that none of the stated objectives of eliminating black money, terror financing and counterfeit currency have been met. To promote a less cash economy, cursive steps like demonetization is ineffective and the cash in circulation after one year is close to 90% of the previous levels, he added.
Manmohan Singh said that “Black money and tax evasion are a menace that needs to be tackled, but note ban was not the solution. It had been suggested many times in the past as well, but as a responsible government, we never took such a drastic measure. Nowhere in the world has any nation taken such a drastic step that took away 86 percent of the legal tender…The stated objectives of note ban have not been met.”
He also alleged that the fact that almost 99% of the demonetized currency came back into the banking systems has punctured the government’s claims. He further informed that though the Modi government claims to have got back black money in the banks, there are also wide spread reports of the rich converting their black money into white money., while the poor have undergone immense suffering.
Demonetisation has proved to be a mere bluster to reap political dividends, while the real offenders have escaped, the former Prime Minister states. He also added that “I repeat what I said in the parliament, this was organized loot and legalized plunder. This twin blow (GST and note ban) is a complete disaster for our economy, it has broken the back of our small businesses and traders.”
Further attacking the moves of Narendra Modi, Manmohan Singh said that “we saw the impact of demonetization on the economy when the GDR growth rate dropped to 5.7% under the new calculation.” Even this is underestimated as the pain of the informal sector has not even been calculated, he added. He also informed that a drop of 1% in the GDP annually cost the nation around 1.5 lakh crore rupees.
Addressing the gathering, the economist-politician said that demonetization has also badly impacted the youth as they lost their jobs and opportunities, the business who had to shut down and the pain of the young entrepreneurs, whose drive to succeed was turned down by these drastic decisions of Modi.
He attacked the Modi government saying that it is a matter of concern that the ruling government did not learn any lessons from these blunders. Instead of providing relief to the poor and the marginalized, farmers traders and the small and medium business, who suffered the repercussions of demonetization, the government is still claiming it to the right moves and that the Indian economy was on the right track and it furthermore to increase the suffering thrust the badly-designed GST.
Further giving details of the losses faced by India due to the Modi made disasters, Manmohan Singh said that “It’s broken the back of small and medium enterprises. Industrial clusters have been affected and that has hampered production… We had to run for Chinese imports at the cost of Indian jobs. In the first half of 2016-17, India’s imports from China stood at Rs 1.96 lakh crore. In 2017-18, it increased to Rs 2.41 lakh crore.”
The former Prime Minister also attacked the incumbent Prime Minister Narendra Modi on the launch of bullet train project calling it an exercise of vanity. He said that “Did the PM consider the alternative of the high speed train by upgrading broad gauge railway? Our railways are languishing and are in dire need of investments.”
Gujarat has become the battleground for BJP and Congress, ahead of the assembly elections in the state due on 9 and 14 Dec. Congress has been actively campaigning day and night, trying hard to bring the ruling BJP and end its 22 years of political exile in Gujarat. Congress is using not ban and GST as its weapons to slash down the BJP. As it is said that Gujarat is one of the most affected states due to the Modi made disasters, the move of Congress leader and economist-politician Manmohan Singh, addressing the traders and businessmen in Ahmedabad seem like a tactful move played by the Congress.