Former Prime Minister Manmohan Singh took to the stage to express his views (video above) on demonetisation and the Goods and Services Tax during a meeting with a group of traders in Ahmedabad on Tuesday. In his address, he said that the two schemes, which Prime Minister Narendra Modi’s government ostensibly created in the name of people’s welfare and the fight against corruption and black money, were “badly designed and hastily implemented” and a complete disaster for the Indian economy. Here are the key highlights from his speech:
- Singh started his address by “invoking the memory of more than 100 people who lost their lives last year in the wake of demonetisation.” Calling it a “disastrous policy”, he said it was thrust on the people of India.
- He marked November 8, 2016 as “a black day for our economy and for our democracy.” Recalling his feeling of shock on hearing Prime Minister Modi’s announcement, he said: “I wondered who would have advised him to inflict such a reckless step on our nation and whether any considered thought went into it.”
- “Black money and tax evasion are a menace which the country needs to tackle but demonetisation was clearly not the solution,” he said. He disclosed that demonetisation had been suggested many times in the past as one of the methods to eradicate black money, yet his government purposefully refrained from implementing such an extreme step as the cost always exceeded the benefits very substantially.
- Criticising the introduction of an even more high value currency note of Rs 2000, he said: “Nowhere in the world has any democracy undertaken such a coercive move withdrawing 86% of the legal tender in one single swoop.”
- Singh said that the Modi government has significantly failed in meeting any of the stated objectives of demonetisation, namely, eliminating black money, terror financing and counterfeit currency. “The cash in circulation after one year is close to 90% of the previous levels,” he reminded everyone. The fact that more than 99% of the demonetised currency came back into the banking system has further punctured the government’s claims, he said.
- “The policy has proven to be mere bluster to reap political dividends, while the real offenders have escaped,” he declared, adding that demonetisation was supposed to have helped the poor, but had only increased their suffering instead.
- Singh labelled the move as “organised loot and legalised plunder” as the GDP growth rate dropped to 5.7%, jobs were lost, businesses were shut down and lives were lost.
- He went on to criticise the government’s choice to inflict “a badly designed and hastily implemented GST,” calling the twin blow a complete disaster for our economy.
- “What is even more tragic is that none of the lessons from this monumental blunder have been learnt by the Modi government,” Singh concluded.