Demonetisation was 'loot, plunder', claims Manmohan Singh


Former prime minister Manmohan Singh argued the opposition's case, claiming that not only was demonetisation a flawed decision that had caused a needless disruption to the Indian economy, but it also risked unleashing harassment by tax sleuths probing illegal deposits.

"Demonetisation has proved to be mere bluster to reap political dividends while the real offenders have escaped. Today, every global agency eulogise the kind of structural reforms India has initiated", said Finance Minister Arun Jaitley in retaliation to Singh's allegations.

Describing the Modi Government's measure of demonetisation taken a year ago on November 8 as a "watershed moment", Finance Minister Arun Jaitley on Tuesday said the step was badly needed to change the status quo in the prevailing economic system. Invoking the memory of those who lost their lives in the wake of the note ban announced on, Singh said that instead of learning from the demonetisation disaster, Prime Minister Modi inflicted India's poor with a "badly designed and hastily implemented" Goods and Services Tax (GST).

Fielded by the party in poll-bound Gujarat, Manmohan Singh said the measure had failed its ostensible goal of curbing wealth accumulated through tax evasion as it was known by now that none of the stated objectives of eliminating black money, terror financing and counterfeit currency have been met.

The Congress fielded former Prime Minister and economist Manmohan Singh to take on the ruling NDA on the eve of the first anniversary of demonetisation.

"Black money and tax evasion are a menace that the country needs to tackle but demonetisation was clearly not the solution".

Highlighting the impact of demonetisation on jobs, informal sector, farmers and small and medium enterprises (SMEs) alike, Singh said that the move coupled with GST would push people back into poverty after the UPA-led government had brought 140 million people out of poverty.

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During his speech, he said that none of the stated objectives of eliminating black money, terror financing and counterfeit currency have been met.

"Nowhere in the world has any nation taken such a drastic step that swept off 86 percent of the currency". He said structural reforms like the note ban would have consequences. The fact that more than 99 per cent of the demonetised currency came back into the banking system, has punctured the government's claims.

Union minister Ravi Shankar Prasad joined Mr Jaitley in attacking Dr Singh for terming demonetisation as "organised loot".

'We saw the impact of demonetisation on the economy when the GDP growth rate dropped to 5.7 per cent under the new calculations.

Singh said India's imports from China in the first half of the fiscal rose 23 per cent to ₹2.41 lakh crore, largely due to demonetisation and GST.

Countering this, Singh said, "The government says that they will pursue all those who made large deposits in banks after demonetisation". This was done by the government without paying any heed to our advice, both in Parliament and in private consultations.Compliance requirements have become a nightmare for small businesses. He wondered if raising questions about bullet trains made one anti-development or questioning GST or demonetisation made one a tax evader.

These twin blows damaged India's medium and small manufacturing sectors and our businesses had to run to Chinese imports at the cost of Indian jobs, he added.