A year into demonetisation, the opposition and the government on Tuesday exchanged verbal blows over the action with former Prime Minister Manmohan Singh calling it disastrous while Finance Minister Arun Jaitley rejected the charge saying there was an ethical and moral rationale behind the decision which had given a “new direction” to the economy.
Jaitley, however, acknowledged that the “benefits may not be immediately visible” but would make future generations proud.
Fielded by the party in poll-bound Gujarat, Manmohan Singh said the measure had failed its ostensible purpose 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 fact that more more than 99 per cent of the (spiked) currency came back into the banking system has punctured the government’s claim. There are also widespread reports of the rich converting their black money into white while the poor have undergone immense suffering,” he said, “invoking the memory of more than a hundred people who lost their lives last year in the wake of the demonetisation”.
Calling the withdrawing of 86 per cent of legal tender in one single stroke as undemocratic and a coercive move, the former Prime Minister said “the demonetisation was clearly not the solution” to end the menace of black money and tax evasion in India.
“Demonetisation has proved to be a mere bluster to reap political dividends while the real offenders have escaped,” he said, again calling it “an organised loot and legalised plunder”.
He said while the demonetisation had reduced economic growth to 5.7 per cent, it was still “bound to be a gross underestimate as the pain of the informal sector is not adequately captured in the calculation of the GDP”.