Former Indian PM Manmohan Singh Says Demonetization Will Hurt SMEs
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The man who led the country as Prime Minister for handsome 10-year tenure has decided to speak on one of the world’s biggest reforms undertaken by India’s current PM Narendra Modi.
The demonetization drive of Rs 500 & Rs 1000 notes aimed at curbing black money has received a high degree of ire from the Opposition political parties in India.
However, the veteran economist Manmohan Singh speaking against the move is worthy of taking note.
Singh launched India's economic reforms in 1991 as the then Finance Minister, and later as the Prime Minister who presided over 8.5 percent GDP growth for most of a decade.
The low-key Singh who has often been referred as a mute leader called the demonetisation of high value currency notes ‘monumental mismanagement’ by the government.
Singh called the measure a case of organised loot and legalised plunder and warned of a major hit to the gross domestic product of the country.
“This scheme of demonetisation, the way it has been implemented will hurt agricultural growth in our country, will hurt small industry, will hurt all those people who are in the informal sectors of the economy. My view is that GDP growth can fall by 2 per cent and that is an underestimate,” said Singh.
Singh urged Narendra Modi to find pragmatic means to relieve people of their distress.
Striking rhetoric, Singh said he would like to know from the Prime Minister, in which country where people have deposited their money in their banks but have not been allowed to withdraw.
The former PM also pointed to the manner in which the cooperative banking system and people in rural areas are suffering as a result of the demonetisation move.
"For those saying this is good in the long run, it reminds me of John Keynes' words, 'In the long run we are all dead’,” said Singh.