On 24th November, Manmohan Singh the Ex-Prime Minister of India, gave a speech in the Rajya Sabha, the harshest criticism on the government’s demonetization which was introduced a month ago.
Singh an Oxford and Cambridge educated economist, was scathing in his attack calling the move as a “monumental blunder”, and “organized loot” and “legalized plunder”.
Just two weeks later, Dr Manmohan Singh has come down heavily on the move again, this time with a detailed opinion editorial in The Hindu today.
This time he has called the move as a “mammoth tradegy” and saying that “ it is letting the black hoarders go away with a mere rap on the knuckles”.
- Good Intentions don’t justify the move
The ex-prime minister has called the move taken by the government, which was taken to “end the clutches from enemies from across the border, using fake currency” and to “break the grip of corruption and black money”, arguing that the end result is disastrous and thus the intention meaningless.
- Move a travesty as millions of Indians are without bank access
This came behind the statement saying that, the number of banks in the country have doubled from 2001. But, there are 600 million Indians who live in towns and villages where there is not even one bank. To label all these people as black money hoarders and throw the lives of hundreds of millions of poor people in disarray is a mammoth tragedy.
- It won’t solve its purpose because only a tiny fraction of black money in cash
It can be said that even past government have used the services of Income Tax Department, Enforcement Directorate and schemes such as Voluntary Disclosure to crackdown on illicit money, these efforts targeted only “those suspected to be holders of such unaccounted wealth, not all citizens.”
He further said that, while a small portion of this money is kept in cash, a majority of this is unaccounted wealth is not stored in the form other than cash.
Singh then concludes that demonetization will cause “grievous injury to the honest Indian who earns his/ her wages in cash and a mere rap on the knuckles to the dishonest black money hoarder.”
- The Rs 2000 note is a bad idea
Singh commented further saying that the Rs 2000 note was a bad idea and made it easier to generate such unaccounted wealth in the future.
- Other Countries have done the same thing, but in a better way
He said that some other countries have done the same thing in their countries economy but they have taken some time and not as a sudden overnight operation. IT was seen that in a country as vast and diverse as India, demonetization was expectedly going to be monumental challenge.
- Decision is hasty
Singh says further that he had seen the experience of standing in long lines during the war for rationed food, but he never imagined that his countrymen and women too would wait endlessly for rationed money. Singh calls it “heartbreaking”.
“That all of this suffering is due to one hasty decision makes it even more disconcerting,” he writes.
- It’s really bad for the economy
Singh writes that “the microeconomic impact on this decision of the government is likely to be hazardous.”
Taking a pot-shot at the Modi government which came to power after decimating the UPA government, he said that India’s trade numbers are at a “Multi-year low”, the industrial production is shrinking and job creation is next to none, this policy can act as a negative shock to the economy.
He also said that “the demonetization on currency have dented the confidence of hundreds of millions of Indian consumers” and that “this can have ripple effects on GDP growth and job creation.”
He went on to talk about deaths in the countries saying that every government has to care for the weak.
Singh’s op-ed became a subject of discussion on the social mead with ‘Dr Manmohan Singh’ trending on Thursday morning. Here’s what Twitteratti said:
There was a mixed reaction from them; some of them praised it, giving the credential as an economist.
Nobody in India will doubt Dr Manmohan Singh’s credentials as an economist. V good piece on demonetisation: https://t.co/NRLjPGQ3z8
— Chetan Bhagat (@chetan_bhagat) December 9, 2016
While others were harsh with their criticism on the government:
“Demonetisation will shrink GDP by 2%”
Where’s the evidence?
Manmohan Singh said it
MMS, Pls explain
MMS: I’ve exhausted annual speech quota
— Ram Prasad (@ramprasad_c) December 10, 2016
— हम भारत के लोग (@India_Policy) December 9, 2016
— Sir Ravindra Jadeja (@SirJadeja) December 9, 2016