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2% GDP Drop, Loss of Faith in Currency System: What Manmohan Singh Said

News18.com

First published: November 24, 2016, 2:11 PM IST | Updated: November 24, 2016
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2% GDP Drop, Loss of Faith in Currency System: What Manmohan Singh Said
PM Narendra Modi and former PM Manmohan Singh in Rajya Sabha on Thursday.

In a rare intervention in Parliament, former Prime Minister Manmohan Singh lashed out against the demonetization drive calling it “organised loot and legalised plunder,” with PM Narendra Modi looking on.

Dr Singh who is also a former finance minister and a former Reserve Bank of India governor said the drive has resulted in people losing faith in the currency and the banking system.

Here, in brief, is Dr Singh's take on how the Modi government's step to demonetise Rs 500 and Rs 1,000 notes is affecting the economy:

*The decision will result in decline of GDP by 2 per cent, it being an under-estimate.

*Agriculture, unorganised sectors and small industry has also been hit hard by it

*People’s confidence in banking system is weakened. We do not know what will be the final outcome of demonetisation. This can erode people’s confidence in the currency system.

*Prime Minister Narendra Modi wants 50 days for demonetisation drive but the poor people in the country still suffer. The PM must provide relief to the sufferings of the people.

*The way the scheme has been implemented, it's a monumental management failure.

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