Urjit Patel's resignation severe blow to economy: Manmohan Singh

Manmohan Singh calls ‘demonetisation an ill-fated, ill thought exercise’, Indian economy is yet to recover

Former Prime Minister Manmohan Singh shared his scathing opinion on the second anniversary of demonetisation on Thursday and said, “Today is a day to remember how economic misadventures can roil the nation for a long time.”

“It is often said that time is a great healer. But unfortunately, in the case of demonetisation, the scars and wounds of demonetisation are only getting more visible with time,” he said in a statement. I urge 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,” said the former prime minister.

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Calling Prime Minister Narendra Modi’s overnight ban on Rs. 500 and 1,000 notes on November 8, 2016, an “ill-fated and ill-thought exercise”, Dr Singh said “the havoc it unleashed on the Indian economy and society is now evident to everyone.” The cash ban, he said, impacted every single person, regardless of age, gender, religion, occupation or creed.

“Beyond the steep drop in headline GDP growth numbers after demonetisation, 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 demonetisation shock,” said the former prime minister, who is a noted economist.

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“This has had a direct impact on employment as the economy continues to struggle to create enough new jobs for our youth. The financial markets are volatile as the liquidity crisis wrought by demonetisation is taking its eventual toll on infrastructure lenders and non-bank financial services firms. We are yet to understand and experience the full impact of the demonetisation exercise. With a depreciating currency and rising global oil prices, macro-economic headwinds are also starting to blow now.”

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“It is therefore prudent to not resort to further unorthodox, short-term economic measures that can cause any more uncertainty in the economy and financial markets,” Singh said.

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