P Chidambaram says demonetisation impact to last into 2018-19

Former Finance Minister and senior Congress leader P Chidambaram on Sunday said demonetisation was the "biggest scam of 2016". Chidambaram also said due to the impact of note ban, India is likely to grow by only 6-6.5% in 2016-17, much lower than what the Central Statistical Organisation and RBI have predicted. The CSO has predicted a growth rate of 7.1%, while RBI pegged it at 6.9% for financial year (FY) 2016-17.

"I am sorry to make the prediction that 2016-17 will end with a growth (rate) between 6 and 6.5%, a good 1% down from the earlier estimate and that means a hit of ₹1.5 lakh crore on GDP," said Chidambaram, speaking at a Congress campaign event in Mumbai for the February 21 Brihanmumbai Municipal Corporation polls.

Impact of demonetisation to last into 2018-19

Chidambaram said that growth in FY 2017-18 would also be around 6-6.5%, due to the lasting impact of the note ban. "2017-18 will not see a growth higher than what we have in 2016-17 as the world economy is not benign anymore and we have a unpredictable man sitting in the White House," the senior Congress leader said, adding that growth would continue to be at the same levels in FY 2018-19 as well.

He said sooner than later the government will realise the folly of demonetisation. "You first demonetise and then say we are remonetising. What is this joke?" Chidambaram said. He termed demonetisation as the "biggest scam of 2016" which the government does not want to acknowledge. Taking away old notes and printing new notes will not put an end to corruption, or black money or counterfeiting, he said. This is a classic example of 'khoda pahad, nikli chuhiya' (Much ado about nothing)," he added.

Chidambaram asserted that that it will take up to June for full remonetisation. "By March, we should have about ₹11 lakh crore of currency back in circulation and by June we would have ₹15.44 lakh crore.

Chidambaram: Media living under fear in BJP regime

"Dalits are living in fear, minorities are living in fear, students and universities are in fear. Media is also in fear," said Chidambaram, observing that the media has become very "stingy" while covering parties other than the BJP. "Most channels today are cheerleaders and most newspapers today are mute. It is a sad state of affairs in a democracy."

Chidambaram, however, praised regional media for being more independent than the national media. Stating that it was well known that several "direct and indirect pressures" were being exerted on media, he cited the example of a news channel whose senior anchor had interviewed him, but it was taken off air at the last moment. Chidambaram said neither he nor the journalist knew why the interview was not telecast.

"Clearly, the message is that behave yourself. If there is too much criticism, the government is watching you. I sincerely hope that the media will shake off its fear. Media constantly preaches that in a vibrant democracy people must speak their mind but first media must speak out its mind," he added.