Demonetisation, GST a complete disaster for economy: Manmohan
ahmedabad — Former Prime Minister Manmohan Singh on Tuesday said the “twin blow” of demonetisation and the “badlydesigned” and “hastily-implemented” Goods and Services Tax (GST) was a “complete disaster” for India’s economy and asked Prime Minister Narendra Modi not to lower the democratic discourse by calling his critics antinational or anti-development.
A day before the first anniversary of the government’s November 8, 2016 decision to spike 1,000 and 500 rupee notes, Manmohan Singh in his address to small businessmen and traders in this city of electionbound Gujarat said the move was a “black day for our economy and indeed for our democracy”.
He said the measure to recall large currency notes to curb tax evasion and black money had been suggested to earlier governments too but “we never took such a drastic measure because the... cause of demonetisation always exceeded the benefits very substantially”.
“One must also remember that nowhere in the world has any democracy undertaken such a coercive move (of) withdrawing 86 per cent of legal tender in one single (stroke). Neither would anyone advise bringing out even more high currency notes of Rs 2,000 after elimination of 500 and 1,000 rupee notes.”
The noted economist said he still remembered how “shocked” he felt when Modi announced the decision on the night of November 8 last year. “I wonder who advised him to inflict such a reckless step on our nation and whether any considerable thought went into it. Black money and tax evasion are a menace that the country needs to tackle,” he said, adding “the demonetisation was clearly not the solution”. He said the measure had failed its ostensible purpose of curbing wealth accumulated through tax evasion as it was known by now that none of the stated objectives of eliminating black money, terror financing and counterfeit currency have been met.
“The fact that more more than 99 per cent of the (spiked) currency came back into the banking system has punctured the government’s claim. There are also widespread reports of the rich converting their black money into white while the poor have undergone immense suffering,” he said. —
Black money and tax evasion are a menace that the country needs to tackle...the demonetisation was clearly not the solution. Manmohan Singh