Demonetisation Was an Extremely Foolish Move, says Chidambaram

New Delhi, Nov 30 : Former Finance Minister P Chidambaram on Friday slammed the Narendra Modi government for its note ban and GST decisions, saying that “demonetisation was an extremely foolish move.”

“Everything about the GST is wrong except the idea of GST. I don’t know why people (on former CEA Arvind Subramanian) don’t speak when they are in office? What fear has this government instilled in people?” he added.

Former Chief Economic Advisor Arvind Subramanian,in his book Of Counsel: The Challenges of the Modi-Jaitley Economy, has said demonetisation “was a massive, draconian, monetary shock” but did not result in a significant fall in nominal GDP growth, in contrast to the massive fall in currency in circulation.

Subramanian was CEA from October 2014 to July 2018 before he returned to the US citing family commitments, said: “Demonetization was a massive, draconian, monetary shock: in one fell swoop 86 per cent of the currency in circulation was withdrawn… Real GDP growth was clearly affected by demonetization. Growth had been slowing even before, but after demonetization, the slide accelerated.

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