Former Prime Minister Manmohan Singh on Monday said demonetisation was sure to pull down the country's growth rate, noting that the effects were already visible and for all to see.
Manmohan, who was responding to queries on the effects of demonetisation after he released the Congress' manifesto for the coming assembly elections in Punjab, said, “Demonetisation will have an impact on the country's GDP. The effects were being talked about. Now the effects of the move are right there in front of us.”
The former premier, who had taken on the Modi government during the winter session of parliament on the issue of demonetisation, said it is now proved that the decision, announced on November 8, will have an adverse impact on the country's economy and will bring down the national income, which is the GDP.
He referred to the assessment made by the National Income Unit of the Central Statistics Organisation, according to which the GDP for the financial year 2016-17 is pegged at 7.1 per cent as against a target of 7.6 per cent as had been earlier expected.
Manmohan noted that this, however, does not account for the impact of demonetisation as it was based on the period preceding November eight, when the decision to demonetise Rs 500 and Rs 1000 notes was announced.
“If this is taken into account, you will see the adverse effect of demonetisation on the GDP,” he said.
Manmohan also said that note ban was bound to figure prominently in the coming round of Assembly elections in five states including Punjab. “It is an important issue, and it will figure in the state elections,” he said.
Leading the Congress' attack on the Modi dispensation on the issue of demonetisation in Parliament, Manmohan had said in the Rajya Sabha during the winter session that the decision would undo the economic gains made by the country during the last several years. He had said that the GDP was expected to be reduced by at least two percentage points.
Manmohan had termed demonetisation a “monumental mismanagement” and an “organised loot”.
