Modi slams economists, says demonetisation is a case study

Three months after Narendra Modi announced banning of Rs 500 and Rs 1,000 notes, resulting in the world’s largest cash crunch, the Prime Minister said that the move will be a case study for economists.

business Updated: Feb 08, 2017 19:43 IST
Sunny Sen
Sunny Sen
Hindustan Times
Narendra Modi,Rajya Sabha,Demonetisation
Prime Minister Narendra Modi waves after delivering a speech during a state assembly election rally in Ghaziabad on February 8, 2017. (AFP)

On Wednesday, speaking in the Rajya Sabha, Prime Minister Narendra Modi demonetisation was not a “political fight”, neither was it targeted towards any particular group of people.

The economic situation, that many global and Indian economists said will slow down the economy, weeded out 86% of the bank notes – in denomination of Rs 500 and Rs 1,000 – in circulation.

The Prime Minister, however, trashed all claims three months after announcing the economic decision while speaking at the upper house, said that it was the right decision, taken at the right time.

Nobel laureate Amartya Sen, former Reserve Bank of India chiefs and global brokerages have said that demonetisation will have a negative impact of the nation’s economy.

“World’s economists don’t know parameters to assess it. What India did will be a case study for economists worldwide,” Modi said. “There is no reason for India to be left behind as the world moves forward.”

A day before, on Tuesday, Modi while speaking at Lok Sabha (the lower house) said that the note-ban was possible because the country’s economy was in good shape. The prime minister, however, did admit that there was a brief lull in business just after the announcement.

Modi’s speech at the parliament created a ruckus, and political parties including the Congress walked out, while the prime minister was still speaking.

Taking potshots at his predecessor, Modi said, “People should learn from Dr. (Manmohan) Singh how to bathe in bathroom wearing a raincoat.”

In November, Singh had said that demonetisation was implemented with “monumental mismanagement”, which will cause several deaths and distress among farmers and small traders. He has then said that the note-ban would lead to “organised loot and legalised plunder”.

Coming back to demonetisation, Modi said that “cashless would take India step-by-step, slowly in the direction of a clean economy.”

He added that this economic decision wouldn’t have been possible during Indira Gandhi’s time – a similar question was raised during 1981.

Modi did agree that the months after demonetisation was “inconvenient”, but he also said that “doesn’t mean we continue in the same way”.

Maybe that is a good enough reason for the world’s largest cash crunch to become a case study for economists.

First Published: Feb 08, 2017 19:43 IST