‘India’s note ban was a draconian shock’
After keeping a studied silence on India’s 2016 demonetisation move as long as he was Chief Economic Adviser to the Government of India, Arvind Subramanian has broken his silence six months after quitting the job.
He has described the note ban as a massive, draconian, monetary shock that accelerated economic slide to 6.8 per cent in the seven quarters after the decision.
“Demonetisation was a massive, draconian, monetary shock: In one fell swoop, 86 per cent of the currency in circulation was withdrawn. The real GDP growth was affected by the demonetisation ... after demonetisation, the (growth) slide accelerated,” Subramanian says in one chapter of his soon-torelease book Of Counsel: The Challenges of the Modi-Jaitley Economy.
“In the six quarters before demonetisation, growth averaged 8 per cent and in the seven quarters after, it averaged about 6.8 per cent,” Subramanian wrote.