Slowdown in economic growth due to note ban: Former PM Manmohan Singh

GDP in the January-March quarter grew at the slowest pace in at least four quarters at 6.1 per cent as against a 7.0 per cent growth in October-December, data released by Central Statistics Office (CSO) last week showed.

By: Express Web Desk | New Delhi | Updated: June 6, 2017 3:43 pm
narendra modi, pm modi, manmohan singh, modi remark, raincoat remark, modi target manmohan, congress, congress target modi, parliamnet, budget session, indian express news, india news Prime Minister Narendra Modi with former PM Manmohan Singh. (File photo)

Former prime minister Manmohan Singh attributed the sharp slowdown in the country’s economic growth to the note ban decision taken by the Centre last November.

The step, that involved withdrawing almost 86 per cent of the currency from circulation, was meant to flush out black money from the economy, slash at the roots of terrorist funding and eliminating counterfeit currency. The Centre defended the decision saying it would lead to long-term gains.

In remarks made at the Congress Working Committee (CWC) meeting in New Delhi, Singh said the economy is running on just ‘one engine of public spending.’ He added that private sector investment has collapsed. The CWC is discussing the current political climate in the country and the upcoming presidential elections.

GDP in the January-March quarter grew at the slowest pace in at least four quarters at 6.1 per cent as against a 7.0 per cent growth in October-December, data released by Central Statistics Office (CSO) last week showed.

“Analysis of policies like demonetisation cannot be done through simple post hoc ergo propter hoc. Because it is after this, so it is because of this…impact analysis of a policy is an extremely sophisticated field in econometrics. I would caution against reading a single number which comes after an event as being reflective of the consequences of the event,” Chief Statistician TCA Anant had told the Indian Express. He added that demonetisation is one of the elements impacting GDP.

Opposition leaders like Mamata Banerjee have also criticised the Narendra Modi government over the note ban decision saying she rightly estimated it would lead to job losses and decline in productivity.

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  1. M
    Mani
    Jun 8, 2017 at 1:45 pm
    I am not an conomist to give a qualified comment on this demonetisation and its impact, but I am not finding any jubliation in the society as expected much by the society. People felt like steep drop in the prices of the commodieties but on the other hand the REserve Bank as cautioned that the imfation will go high in the comming months. It is still remaining dark and silent to the society how much black money has been recovered which is claimed a lot.
    Reply
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      Samir
      Jun 8, 2017 at 8:06 am
      I repeat that the circus called demonetization was to fill the treasury of BJP with all the Black money they had ac ulated for 2019 elections and funding saffron terrorist groups in the name of Hindutva. It was calculated step just like Beef Ban and Triple Talaq issues to divert the mind of the nation from the promises of Development and Ache Din. People who don't understand will understand but too late and Bhakts will never agree with the TRUTH.
      Reply
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        Dhanush
        Jun 8, 2017 at 4:04 am
        DEMONETIZATION is a CANCER which killed ECONOMIC BOOM in the country and put back country into Economic Decline and taking us 50 year back when economic struggle and hardship cause immense suffering of most population
        Reply
        1. M
          Mohan
          Jun 7, 2017 at 5:36 pm
          Even if the demonetisation has led to a temporary fall in GDP, the step taken by the government has drastically clamped down on the cancer of corruption. Congress will never talk about this. In fact, they have no right to talk about this issue. Public should remember the role of Congress and never ever vote for them again!
          Reply
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            Sanju
            Jun 8, 2017 at 4:00 am
            In fact it has wosen. Corruption has sky rocketed and Black Money in Swiss Bank Accounts has doubled under Modi with Corporate Mafia forcing Farmers for more suicides with Demonetisation and now cattle ban only source of survival. Due to corruption PayTM, Jio, Swipe Machine owners made record profits at the expenses of 2 crore jobless due to Note ban. Loans of 1000 Richest have been written off as they will fund bJP election. EVM Tampering has become biggest form of corruption in the country.
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            1. N
              Nirav
              Jun 8, 2017 at 2:33 pm
              ha ha ha ha ha
              Reply
              1. N
                Nirav
                Jun 8, 2017 at 2:33 pm
                ha ha ha to mohan's comment
                Reply
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                deepak sharma
                Jun 7, 2017 at 9:35 am
                I am not fully agreed with ex PM. DeMonetisation could have been a biggest economic change in indian Economy but mismanagement and bad planning in Execution by Central Govt. And RBI made this great step to foolish attempt. Actually what I thought this Govt. Is just election oriented and plans policies according to election dates. May God give some wisdom to this Govt. and love for country and it's human beings.
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                  pankaj
                  Jun 7, 2017 at 3:57 am
                  Now time for Indian express to remove this article from front page after my comment. Dear manmohan and pseudos, for 3 months even if note ban brings growth to below zero we are ok.. Forget about any dip... Looks worried about 3 month dip and not system improvement and gain for next 30 years in tax.. That tax which will provide infrastructure and health funding...
                  Reply
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                    ck
                    Jun 7, 2017 at 2:16 am
                    Lot of response give the impression of keenness of public in this matter. No doubt that the economy is dipping so have the worry but the experts further told that the worst is not over, putting the public in suspense.
                    Reply
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                      chander
                      Jun 7, 2017 at 1:06 am
                      Technically it is "remonetization" and not demonetization. It is not like you give Rs.500 and the government returns only Rs.100. Every honest tax payer ets were made w . No honest tax payer lost any money like it happened in Germany or Argentina. Many naxal terror outfits had to write their cash pile that they had ac ulated by wayside robberies. Banks capital base also got strengthened by the increase in deposits. They had eroded capital base from many political induced loans. Thirdly the government shifted currency printing to domestic. Previously they were being printed in Britain. Some new notes somehow managed to travel to stan from Britain.
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                        AntiWahhabi
                        Jun 7, 2017 at 4:40 am
                        Britain... Wow thank you for mis- educating us
                        Reply
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