Former PM Manmohan Singh calls demonetisation an ‘ill-thought’ move

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The former prime minister Manmohan Singh called demonetisation an “ill-thought” move that unleashed havoc on the Indian economy as centre governments surprise move completes two years on Thursday.

Criticizing the demonetisation Manmohan Singh said that today (Thursday) marks the 2nd anniversary of the ill-fated and ill-thought demonetisation exercise. he said the havoc that it unleashed on Indian economy and society is now evident to everyone.

The former prime minister, also a noted economist, warned that the impact of the note ban was beginning to manifest now. “We are yet to understand and experience the full impact of the demonetisation exercise. With a depreciating currency and rising global oil prices, macro-economic headwinds are also starting to blow now.”

“Notes ban had impacted every person, regardless of age, gender, religion, occupation or creed. It’s often said that time is a great healer. But unfortunately, in case of demonetisation, the scars and wounds of demonetisation are only getting more visible with time,”. he said.

Singh said that beyond the steep drop in headline GDP growth numbers after demonetisation, the deeper ramifications of notebandi were still unraveling. He added that small and medium businesses that are the cornerstone of India’s economy were yet to recover from the demonetisation shock.

“This has had a direct impact on employment as the economy continues to struggle to create enough new jobs for our youth. The financial markets are volatile as the liquidity crisis wrought by demonetisation is taking its eventual toll on infrastructure lenders and non-bank financial services firms, he said.

Advising the government to not resort to further ‘unorthodox, short-term economic measures’ that can cause uncertainty in the economy and financial markets, Singh said, “Today is a day to remember how economic misadventures can roil the nation for a long time and understand that economic policymaking should be handled with thought and care.”

In the late evening order on November 8, 2016, Prime Minister Narendra Modi had announced that all Rs 1000 and Rs 500 notes, comprising more than 85% of the total value of the currency in circulation at that time, would no longer be recognised as legal tender.