Was Narendra Modi led Center’s decision on the demonetization the right one? What do the economists in the world have to say about it?
According to Former Finance Minister P. Chidambaram, no economists in the world supports demonetization.
While addressing a National Students’ Union of India (NSUI) event in Delhi, Chidambaram said, “Show me one economist anywhere in the world who stood up and said demonetization was a good thing. Not one. On the day PM announced demonetization, Chief Economic Advisor Arvind Subramanian was in Kerala. He was not in Delhi. He was not even consulted. He didn’t know that demonetization is taking place. If CEA doesn’t know, what kind of an economy is this?”
On November 8, 2016, the Modi government had invalidated the Rs 500 and Rs 1,000 banknotes, claiming it was a crackdown on the shadow economy and use of illicit and counterfeit cash to fund illegal activities and terrorism. The move was criticised by several Opposition parties.
READ ALSO: Shortage in Rs 2000 notes; is it a conspiracy or silent demonetization?
Earlier this month, a recent study by the Reserve Bank of India or RBI noted that the Micro, Small and Medium Enterprises (MSMEs) have been adversely hit by the Goods and Services Tax roll-out and demonetization, which had a significant impact on the overall credit of the sector.
Meanwhile, Chidambaram asserted that the under former Prime Minister Manmohan Singh, the Indian economy was “more competent”.
“I’ve seen how President Barack Obama used to sit with Manmohan Singh and listen to him. Not that Obama will accept everything Dr Manmohan Singh says, but he wanted to listen to him to know how to run a huge economy,” Chidambaram said.
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