The impact of demonetisation on the society’s weaker sections and business was far more damaging than what economic indicators reveal, former Prime Minister Manmohan Singh told BloombergQuint.
Singh’s statement comes two days before November 8, the first anniversary of demonetisation, which opposition parties will observe as a “Black Day”.
The former prime minister, who called the note ban “an attack on the independence and credibility of the RBI [Reserve Bank of India] as an institution”, called on his successor Narendra Modi to admit his mistake and “work towards consensual policy solutions to rebuild the Indian economy”.
“I strongly feel the time for politicking over demonetisation is over,” Singh told BloombergQuint. “It is time the prime minister graciously acknowledges the blunder and seeks support from all to rebuild our economy.”
Singh called on everyone to put the country first and “strive to seek solutions to our challenges of jobless and unequal economic growth”.
The former prime minister called the current government’s drive to reduce cash transactions and move towards a digital economy “laudable pursuits”. However, he warned that the Centre’s policy should be geared towards finding “ways to help small businesses become larger”, which, he said, would help India “reap the efficiencies of scale economies”.
“But we need to be able to achieve these objectives without any disruption to these small enterprises in their current form,” Singh said.
On the government’s attempts to formalise the informal economy in the country through measures such as the Goods and Services Tax and demonetisation, Singh said: “If formalisation of the informal sector means widening of the tax base, it should be welcomed. But the means is as important as the ends.”
“GST,” he added, “is certainly an idea in that direction to widen the tax base but the implementation of it is threatening to derail the informal sector entirely,” he told BloombergQuint.