Demonetization was not all required, either technically or economically: Manmohan Singh
New Delhi, September 23: The former Prime Minister Manmohan Singh on Friday said the economy is degrading due to the demonetization that was undertaken in 2016 was not all required, either technically or economically. According to reliable sources, Manmohan Singh is a renowned economist and recognized to be the architect of the reforms of early 1990s and demonetization has not been successful in any civilized country except some of the Latin American nation.
When Manmohan Singh was addressing at the Indian School of Business (ISB) Leadership Summit, he was asked whether the decision of note ban was rig or not, then Manmohan Singh replied that “I don’t think demonetization was at all required. I don’t think it was technically, economically necessary to launch this adventure.”
According to official sources, Prime Minister Narendra Modi announced scrapping of Rs 500 and Rs 1000 currency notes on 8 November 2016. Manmohan Singh said that the process involved withdrawing almost 86 per cent of the currency from circulation and there was bound to be fallout which we are all seeing. He further said that “The economy has slowed down as I had projected a few months ago as a result of demonetization and also the fact that demonetization has been accompanied by the Goods and Services Tax, which is a good thing that we have done in the long term.
Manmohan Singh said that but there are defects that need to be resolved. So, the economy is going down. He said that the growth in the Gross Domestic Product was much higher in the last quarter of 2016-17 than the first quarter of this financial year. But there are certain things that must be done immediately.
Manmohan Singh further mentioned that “When we were in office, investment rate in the economy was 35-37 per cent but now it is even less than 30 per cent. Private investment is not all growing. India needs more investment in the public sector but we cannot depend exclusively on public sector. We must also work on a foreign exchange situation at the same time.”
According to media sources, Manmohan Singh has served as the finance minister of the country two decades back and said that growth cannot take place at a high rate if banking system is not providing money to entrepreneurs and to others who need to invest in our economy. He further said that it is the one are that the country is not spending enough and not giving the required emphasis on preventive healthcare.
Mamohan Singh added that “Yes, I agree that private sector has a role and strong leadership is required for the public health problems and it is the one area where markets are important but not the final solution. Government in our country cannot be wished away. Public sector spending is only 30 per cent of the GDP, which is not too big compared to many other nations. The infrastructure, public healthcare, agriculture are the areas where the government will remain important.”