Manmohan Singh: India is yet to recover from demonetisation shock, scars are getting more visible 

Former Prime Minister Manmohan Singh on the second anniversary of demonetisation slammed the Modi government for its ill thought out exercise. The former prime minister said that the demonetisation has impacted everyone single person in the country, regardless of their age, gender, religion, occupation or creed.

“Today marks the second anniversary of the ill-fated and ill-thought demonetisation exercise that the Narendra Modi government undertook in 2016. The havoc that it unleashed on the Indian economy and society is now evident to everyone. Notebandi impacted every single person, regardless of age, gender, religion, occupation or creed.”

Manmohan Singh also spoke about the deeper ramifications that demonetisation had on the economy and the huge impact it had on the employment sector and financial markets. He also states that the real depth of the situation is yet unknown but things do not look well for the Modi government with the depreciating value of the rupee and rise in crude oil prices.

“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. 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 former Prime Minister.

“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.”

Former PM Manmohan Singh urged the government to restore the transparency in their economic policies and reminds the nation of the consequences of the economic misadventure.

“It is therefore prudent to not resort to further unorthodox, short-term economic measures that can cause any more uncertainty in the economy and financial markets. 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 policymaking should be handled with thought and care.”