On the eve of the second anniversary of demonetization of high-value notes, former prime minister Manmohan Singh stated that the exercise was ill-fated and ill-thought. He said the havoc that it unleashed on the Indian economy and society is now evident to all. “Notebandi impacted every single citizen, regardless of age, gender, religion, occupation or creed,” the noted economist added.
He further said that the scars and wounds of demonetization are only getting more visible with time. “Beyond the steep drop in headline GDP growth numbers after demonetization, the deeper ramifications of notebandi are still unraveling. Small and medium businesses that are the cornerstone of India’s economy are yet to recover from the demonetization shock,” his statement said.
Singh, who had called the decision a loot, said it had a direct impact on employment as the economy continues to struggle to make enough new jobs for the youth. “The financial markets are volatile as the liquidity crisis wrought by demonetization is taking its eventual toll on infrastructure lenders and non-bank financial services firms,” he said.
The former prime minister said the full impact of demonetization is yet to be understood and experienced. “With a depreciating currency and increasing global oil prices, macroeconomic headwinds are also starting to blow now,” he said.
He urged the government to restore certainty and visibility in economic policies. “Today is a day to remember how economic misadventures can roil the nation for a long time and understand that economic policymaking should be handled with thought and care,” he said.