Former Prime Minister Manmohan Singh on Friday said the demonetisation drive was an “unnecessary adventure”, and was the reason for the economy’s current “downhill path”, PTI reported. The Congress leader said demonetisation had not been successful in any civilised country, except some Latin American nations.
“I don’t think demonetisation was at all required,” Singh said at the Indian School of Business Leadership Summit in Mohali. “I don’t think it was technically, economically necessary to launch this adventure.”
In November 2016, the Narendra Modi government had declared Rs 500 and Rs 1,000 notes illegal tender in, what it had claimed then, was an effort to eradicate black money. However, a report released by the RBI on August 30 confirmed that demonetisation has been an economic failure, with very few benefits at a steep cost.
Singh said the economy had slowed down as he had predicted a few months ago. He reiterated that there was a dip in the GDP growth because of demonetisation and the Goods and Services Tax regime. “Therefore, the economy has experienced a downhill path.”
He said India’s GDP growth needs to be around 7% to 8% to resolve several development issues. India’s GDP growth slowed to 5.7% in the first quarter of 2017 from 7.9% in the corresponding period last year.
Singh has been critical of the Narendra Modi-led government’s decisions in the economic sector, including demonetisation. He had said the Indian economy was running on “just one engine of public spending”.