Congress MP Jairam Ramesh conceded in Rajya Sabha Thursday that demonetisation may have been a “smart political strategy” but added it was based on “spurious and dubious economic logic”. Participating in a discussion on the budget, Ramesh said, “It is beyond doubt that demonetisation was a psychological shock. Demonetisation may well have been a smart political strategy but I still maintain that demonetisation is based on spurious and dubious economic logic.” No country barring Myanmar, North Korea and the collapsed Soviet Union that had adopted demonetisation as a strategy, he said.
Describing Finance Minister Arun Jaitley as “the master of spin”, Ramesh said, “Time for spin is over and now, it is time for looking at hard realities. The hard reality is, the economy is subdued, investment sentiment is subdued, investor sentiment is subdued, and I think, he should address some of the structural issues of the economy rather than claiming great victory on the budget as exemplified by the election results. I do not believe that the election results, in any way, negate the conclusion that demonetisation may have been a smart political move, but it has been a singularly disastrous economic move.”
Ramesh referred to a statement each by MoS (Finance) Jayant Sinha, Ramesh — that the UPA had unearthed Rs 1,31,000 crore in black money in its last two years — and by Jaitley — that the NDA had unearthed Rs 1,25,000 crore in black money between May 26, 2014, and November 8, 2016 — and questioned claims about black money being unearthed post demonetisation.
He said the economy grew at an average 7.4 per cent during the UPA’s 10 years and has slowed down during the NDA. About the budget, Ramesh said it is already part of history, all the criticism has been made, “all the spin has been introduced, all the political dividend that had to be got has been obtained”.
D Raja (CPI) highlighted what the budget needed to address: “There is manual scavenging on the one side and Mangalyaan on the other side. India presents a horrible picture of conflicts and discrimination and disparities.” He said the budget does not have adequate steps to contain inflation and create more jobs; it does not raise direct taxes on the rich but has an assurance of reducing corporate tax. “There is a burden of indirect tax on the poor people,” Raja said.
Tapan Kumar Sen (CPM) said year after year, a huge amount of direct tax is lying unrecovered and in every budget the tax is raised but not realised.