Former Chief Economic Advisor Arvind Subramanian has slammed the demonetization, saying that the demonetisation was a massive, draconian, monetary shock.
The new revelation by Arvind Subramanian, who quit the post of chief economic advisor earlier this year, is in his upcoming book "Of Counsel: The Challenges of the Modi-Jaitley Economy", published by Penguin.
During the implementation of the demonetization, there was a confusion on whether Arvind Subramanian was consulted in the decision-making process of demonetisation. The detractors of the government had said that the Prime Minister had not consulted the chief economic advisor on the crucial decision of demonetisation.
In the book he said, “In one fell swoop, 86 per cent of the currency in circulation was withdrawn. The real GDP growth was affected by the demonetisation. Growth had been slowing even before, but after demonetisation, the slide accelerated."
"In the six quarters before demonetisation, growth averaged 8 per cent and in the seven quarters after, it averaged about 6.8 per cent (with a four quarter window, the relevant numbers are 8.1 per cent before and 6.2 per cent after)," Subramanian says.