A substantial part of India’s growth slowdown was because of the “lingering effects” of demonetisation, as well as the Goods and Services Tax, said former Reserve Bank of India Governor Raghuram Rajan.

Speaking to NDTV at Davos in Switzerland, where economists and world leaders have congregated for the World Economic Forum, Rajan said the informal sector was feeling the effects of demonetisation now, and that “businesses have shut down because they could not survive that episode”.

He made the statement when asked why India could not take advantage of the global economic rebound. “Most other countries have had their growth figures updated, but we’ve had them downgraded, and that’s partly because of these two big headwinds,” Rajan said.

He clarified that the government had asked the RBI its view before demonetising Rs 500 and Rs 1,000 noted. “I didn’t think it would have the desired effect,” Rajan told NDTV. “Any economist would say better print the money before taking it away.”

The economist, however, defended the GST regime and said it could have very positive effects in the long term.

Rajan also warned about the rising fuel prices and how it will have an impact on India’s Gross Domestic Product growth. “I think there’s an emerging issue with the oil prices,” he said. “The question is how much does this subtract from growth because we obviously benefited when it went the other way, and now this will affect us negatively.”

The former RBI governor has been critical of the government’s demonetisation move in November 2016 a number of times. The decision had rendered as illegal tender 86% of the currency in circulation at the time and led to a severe cash crunch countrywide.