Manmohan Singh attacks notes ban

Manmohan Singh attacks notes ban

Attacking his predecessor, Narendra Modi’s measure of withdrawing old high-value bank notes from circulation in 2016,  the former Prime Minister, Dr  Manmohan Singh, has urged the Centre to restore certainty and visibility in its economic policies.

The noted economist called demonetisation an 'ill-fated' and 'ill-thought' exercise and asked the  NDA regime not to indulge in any further unorthodox, short-term economic measures that could cause any more uncertainty in the economy and financial markets.

Dr. Manmohan Singh said in his statement: 'Today marks the second anniversary of the ill-fated and ill-thought demonetisation... The havoc that it unleashed on the Indian economy and society is now evident to everyone'.

'Notebandi (demonetisation) impacted every single person, regardless of age, gender, religion, occupation or creed,'  Dr. Singh said. 'I urge the government to restore certainty and visibility in economic policies. 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 also said that even after two years, the economy was yet to 'recover from the demonetisation shock'.

'It is often said that time is a great healer. But unfortunately, in the case of demonetisation, the scars and wounds of demonetisation are only getting more visible with time.Beyond the steep drop in headline GDP growth numbers after demonetisation, the deeper ramifications of notebandi are still unravelling. Small and medium businesses that are the cornerstone of India's economy are yet to recover from the demonetisation shock.'

He also said that the step had 'a direct impact on employment as the economy continues to struggle to create enough new jobs for our youth'.

Dr. Singh said 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. 'We are yet to understand and experience the full impact of the demonetisation exercise. 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.'

In a sudden move that took everyone by surprise, Modi had on this day in 2016, announced a ban on the currency notes of Rs 500 and Rs 1,000.