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India Yet to Recover from Demonetisation, Scars More Visible Now: Manmohan Singh

Ex-PM Manmohan Singh called Narendra Modi's overnight ban on Rs 500 and Rs 1,000 notes an "ill-fated and ill-thought exercise".

Updated:November 8, 2018, 12:24 PM IST
India Yet to Recover from Demonetisation, Scars More Visible Now: Manmohan Singh
File photo of Manmohan Singh and Narendra Modi.
New Delhi: Former prime minister Manmohan Singh in a statement on Thursday shared his assessment of demonetisation as intense political sparring between the government and the opposition marked the second anniversary of the note ban.

“It is often said that time is a great healer. But unfortunately, in the case of demonetisation, the scars and wounds of demonetisation are only getting more visible with time,” he said.

Calling Prime Minister Narendra Modi's overnight ban on Rs 500 and Rs 1,000 notes on November 8, 2016, an "ill-fated and ill-thought exercise", Singh said the havoc it unleashed on the Indian economy and society is now evident to everyone. The cash ban, he said, impacted every single person, regardless of age, gender, religion, occupation or creed.

"I urge the government to restore certainty and visibility in economic policies. Today is a day to remember how economic misadventures can roil the nation for a long time and understand that economic policy making should be handled with thought and care," said the former prime minister.

The Congress has said that PM Modi should apologise to the nation for "wrecking the economy and causing its people untold hardships".

"Beyond the steep drop in headline GDP growth numbers after demonetisation, the deeper ramifications of notebandi are still unraveling. Small and medium businesses that are the cornerstone of India's economy are yet to recover from the demonetisation shock," said the noted economist.

Singh, advised that it was "prudent to not resort to further unorthodox, short-term economic measures" that could cause any more uncertainty in the economy and financial markets.

"This has had a direct impact on employment as the economy continues to struggle to create enough new jobs for our youth. The financial markets are volatile as the liquidity crisis wrought by demonetisation is taking its eventual toll on infrastructure lenders and non-bank financial services firms. We are yet to understand and experience the full impact of the demonetisation exercise. With a depreciating currency and rising global oil prices, macro-economic headwinds are also starting to blow now," said Singh on the second anniversary of demonetisation.
| Edited by: Nitya Thirumalai
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