With demonetisation, Narendra Modi shattered the faith of millions of Indians: Manmohan Singh
Writing for ‘The Hindu’, the former prime minister said the government was under the wrong impression that all black money was in cash.
Former prime minister Manmohan Singh, in an opinion piece for The Hindu on Friday, said that with the decision to demonetise high-value notes, Narendra Modi had “shattered the faith and confidence that hundreds of millions of Indians had reposed in the government to protect them and their money.” While calling the intention behind the drive “honourable” and deserving of support, he criticised the move and the Centre’s push for a cashless economy again.
The senior Congress leader said there was a false notion that “all cash is black money and all black money is in cash”. Highlighting that more than 90% of the Indian workforce was paid in cash, he said “tarnishing their wages as ‘black money’ is a mammoth tragedy”.
Referring to the exercise as a “brazen measure”, Singh said previous governments had not targeted all citizens in their efforts to recover black money. Most nations attempted a currency swap in phases and not overnight, he added. “It is heartbreaking to see and hear of millions of poor Indians standing in long lines to withdraw some money for basic sustenance...That all of this suffering is due to one hasty decision makes it even more disconcerting,” Singh wrote.
The former prime minister, who has also served as a finance minister and a governor of the Reserve Bank of India, predicted a “hazardous impact” from demonetisation. He said the policy could act as a “negative shock to the economy” that is already reeling from “multi-year lows, shrinking industrial production and an anaemic job creation”. Singh said the country’s relatively high gross domestic product ratio indicated the economy’s cash dependence.
“Waging a war on black money may sound enticing. But it cannot entail even a single loss of life of an honest Indian,” he wrote. During his address in the Rajya Sabha on November 24, Singh had described the move to demonetise Rs 500 and Rs 1,000 notes as a form of “organised loot” and said it would reduce the country’s GDP by 2% or more.