Demonetisation ‘utter failure’: I expect very bad numbers for July-September, says P Chidambaram

Training guns on Prime Minister Narendra Modi who has been speaking of demonetisation as a “courageous” move by his government, the Congress leader further said, “It does not take courage to take a wrong decision, but it takes courage to admit one. The PM must show courage to accept that demonetisation was a wrong decision.”

By the end of 2015, India had emerged as the fastest growing economy in the world overtaking China. In the first quarter of 2016 the GDP even clocked a growth rate of 9.2 per cent. But it has been a consistent downslide. In April-June 2017 quarter, the growth rate had slipped as low as 5.7 per cent. While the GDP data for the ongoing quarter is expected to be released in November, Chidambaram has predicted a further slip in the growth.

The debate on demonetisation gained momentum again, after the data released by the Reserve Bank of India (RBI) in its annual report earlier this month, show that 99 per cent of the 15.44 lakh crore of notes taken out of the circulation had returned to the system. “The government and the RBI tried their level best to hold back information on demonetisation for eight months. But the RBI’s annual report has now revealed something I had predicted six month ago. Every single rupee of the demonetised currency will come back. While 99 per cent has returned already, the data on July and August is yet to come. I won’t be surprised if the numbers even exceed 100 per cent,” said Chidambaram. Chidambaram’s latest attack against the Modi government comes within days of former

RBI Governor Raghuram Rajan’s criticism of the demonetisation decision. Congress insiders said that the party wants to use the latest RBI data to target the BJP government. It has started holding media interactions all over the country as part of its offensive.

Pointing out that the original objectives of demonetisation announced by the government were to weed out black money, fake currency, and curb terror financing, Chidambaram said none of these had been achieved.

On the other hand, the move has caused deaths, destroyed jobs, declined the output in the agriculture and the manufacturing sector, a fall in demand and export. The GDP has fallen nearly 1.4 per cent since the demonetisation move.

“A 1.5 per cent lower growth translated to a loss of 1.5 lakh crore,” he pointed out. Where are the jobs? he questions, while labelling DeMo as a “bad decision” which will “continue to cost the country.”

Chidambaram also continued to hit out at the government for “rushing a roll out of the Goods and Services Tax (GST).” He said, “The tax that the government has introduced is a flawed tax. It is not the GST as economists understand it. It was rolled out without adequate preparation and is riddled with very many errors. We warned the government not to rush the roll out, but they didn’t listen,” he said.

When his reaction was sought on the killing of journalist Gauri Lankesh, Chidambaram said, “People speaking out against extreme right-wing ideology are under constant threat. This is not the Indian our founding fathers had dreamt of. And this is not the Indian in which I want my children and grandchildren to grow in.”