New Delhi, Sep 19, 2017: Former Prime Minister and renowned economist Manmohan Singh once again apprised of stubby fall in the GDP by saying that demonetisation and the hasty implementation of GST are bound to affect the economic growth adversely.
In an interview with CNBC-TV18, Manmohan Singh said “Both demonetisation and the GST have had some impact (on GDP growth) and added that “Both would affect the informal sector, the small-scale sector, the sectors today are responsible for 40 per cent of GDP.”
With informal and small-scale sectors accounting about 40 per cent of the USD 2.5 trillion economy, Singh said that the decision of demonetisation, coupled with GST, had an adverse impact on the economy. “And the withdrawal of 86 per cent of currency plus also GST, because it has been put on practice in haste, there are lots of glitches which are now coming out. These are bound to affect the GDP growth adversely,” he said.
Earlier this month, Manmohan’s warning about the PM Modi’s decision to scrap Rs 500 and Rs 1000 notes turn out to be true after the Indian Gross Domestic Product (GDP) growth fell to a three-year low of 5.7 per cent in the first quarter of financial year 2017-18.
Notably, on November 24 tearing apart centre’s vision on Demonetisation drive to curb black money, noted economist Manmohan Singh in Rajya Sabha called the move “monumental mismanagement, organised loot and legalised plunder.”
Pointing out the extent of hardship which notes ban has caused to the common man and small businesses, Singh warned that the note ban will hit at least 2 per cent to GDP due to monumental mismanagement in its implementation.
In razor-sharp words, former PM said, “What has been done can also weaken our people’s confidence in the currency and banking system.”