Time will not heal demonetisation' wounds says Former PM Manmohan Singh

Last Updated: Thu, Nov 08, 2018 16:47 hrs

The phrase time heals all wounds may not be applicable to "scars and wounds" left after demonetisation, said former Prime Minister Manmohan Singh. Singh who has been critical of the surprise move implemented by the government in 2016, was quoted saying that the passing time had instead caused the scars to be visible.

On the centre's decision, Singh said that the second anniversary was a day to remember how "economic misadventures" could roil the nation.

In his words, demonetisation was an "ill-fated" and "ill-thought" exercise. In a statement, he also said that the havoc it unleashed on the Indian economy and society was now evident to everyone.

"Notebandi impacted every single person, regardless of age, gender, religion, occupation or creed," Singh said.

The senior Congress leader asked the government to not resort to further unorthodox, short-term economic measures that can cause any more uncertainty in the economy.

"It is often said that time is a great healer. But unfortunately, in the case of demonetisation, the scars and wounds of demonetisation are only getting more visible with time," the former prime minister said.

Beyond the "steep drop" in headline GDP growth numbers after demonetisation, the deeper ramifications of 'notebandi' are still unravelling, he said.

Small and medium businesses that are the cornerstone of India's economy are yet to recover from the demonetisation shock, Singh asserted.

"This has had a direct impact on employment as the economy continues to struggle to create enough new jobs for our youth," he said, adding that the financial markets are volatile as the liquidity crisis wrought by demonetisation is taking its eventual toll on infrastructure lenders and non-bank financial services firms.

The full impact of the exercise was yet to be understood and experienced, however "with a depreciating currency and rising global oil prices, macro-economic headwinds are also starting to blow now.

"It is therefore prudent to not resort to further unorthodox, short-term economic measures that can cause any more uncertainty in the economy and financial markets."

Singh also urged the government to restore certainty and visibility in economic policies.

"Today, is a day to remember how economic misadventures can roil the nation for a long time and understand that economic policy-making should be handled with thought and care," he said.

The Congress party has announced that it would hold a nationwide protest on Friday to mark the second anniversary of demonetisation. It has also demanded that Prime Minister Narendra Modi should apologise to the people for "ruining and wrecking" the economy.