New Delhi, Sep 1, 2017: It seems like former Prime Minister and renowned economist Manmohan Singh warning about the PM Narendra 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.
This was a drop of 0.4 per cent point compared to the previous, January-April, quarter when the GDP grew by 6.1.
However, the drop, was much higher compared to the corresponding April-June quarter of FY 2016-17, when GDP growth was registered at 7.1 per cent.
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.”
However, on November 14, PM Modi vowed to the nation in a strong voice that “I have only asked for 50 days. Give me time till December 30. After that, if any fault is found in my intentions or my actions, I am willing to suffer any punishment given by the country,” he said, speaking at the foundation stone laying ceremony of the Mopa airport in Goa.
On Thursday, the figures for India’s GDP for the first quarter of the current fiscal that ended in June were out. It showed that India’s economic growth has slid to a three-year low, owing in parts to Modi’s decision to scrap high-value old banknotes to flush out black money. India’s GDP growth has sharply dipped to 5.7% in Q1 Of 2017-18.
The growth has dipped from 7.9% in the April-June quarter in 2016 to 5.7% for the corresponding period this year, proving Singh’s warning about the 2% dip absolutely spot on.