Manmohan calls demonetization "organised loot"; Jaitley reminds him of UPA scams

Manmohan Singh

On the eve of the first anniversary of demonetisation, former Prime Minister Manmohan Singh, the architect of India's liberal economic reforms of 1991, termed last year's ban on high-denomination currency a "disaster" that only benefited China. "This attitude of suspecting everyone to be a thief or an anti-national, this low level rhetoric is damaging to democratic discourse and as real consequences of how we relate to one another as citizens", Singh said.

"Demonetisation has proved to be a mere disaster". "What is ethically and morally correct is also politically correct", the finance minister said in New Delhi, adding the November 8, 2016 decision achieved multiple objectives. "To promote less cash economy coercive steps like Demonetisation are ineffective", he said. Jaitley asked as he asserted that one of the ideas behind demonetisation was India needs to "shrink the quantum of its cash balance".

The Opposition has said demonetization has slowed India's growth and wiped out jobs, while the government says the move has brought down cash in the economy, spurred digitisation, expanded the tax base and fought black money. I remember feeling shocked when I heard the Prime Minister's announcement, and I wondered who advised him to inflict such a reckless step on our nation, and whether any considered thought went into it'. "It pains me to say that the Union government has completely failed to do its duty on both fronts", Singh said as he invoked Mahatma Gandhi and Sardar Patel, the two political giants from Gujarat.

"Black money and tax evasion are a menace that need to be tackled, but note ban was not the solution. I repeat, it was organised loot and legalised plunder", Singh said, referring to a similar statement in Parliament a year ago. Nowhere in the world has any nation taken such a drastic step that took away 86 percent of the legal tender...

Hours after the former Prime Minister's speech, Finance Minister Jaitley strongly defended the economic reforms calling note ban a "watershed moment in the history of the Indian economy". The poor and the marginalised, farmers, traders the small and medium businesses suffered the brunt of demonetisation.

"The fact that more more than 99 per cent of the (spiked) currency came back into the banking system has punctured the government's claim".

The otherwise reclusive former Prime Minsiter Dr Manmohan Singh tore into his successor Narendra Modi for not learning any lessons from the monumental blunder of demonetisation.

"Even this is bound to be a gross underestimate as the pain of the informal sector is not adequately captured in the GDP calculations".

A fierce demonetization critique, Singh will fly to Ahmedabad to hold a media conference to speak on India's economy. The value of transactions for debit and credit cards, in contrast, was Rs 1.6 lakh crore and Rs 2.4 lakh crore respectively during 2015-16. "Instead of providing relief, as I had requested in the Parliament, the government chose to inflict on them a badly designed and hastily implemented GST". The government did not heed to our advice on demonetisation. "These twin blows damaged India's SME sector and our businesses had to run to Chinese imports at the cost of Indian jobs", Singh said.

Citing statistics and examples, the former PM pointed out that the UPA's GST envisoned a single tax capped at 18%, while the current one has transformed it into a "complicated mess with multiple slabs".

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