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Demonetisation a bizarre policy that derailed economy, says Chidambaram

At the Congress plenary session, former finance minister P Chidambaram said demonetisation has led to the collapse of manufacturing sector and paralysed India’s banking sector.

india Updated: Mar 18, 2018 16:38 IST
HT Correspondent
HT Correspondent
Hindustan Times, New Delhi
Manmohan Singh‬,‪Indian National Congress,P Chidambaram
Senior Congress leader Ghulam Nabi Azad with former finance minister P Chidambaram during the second day of the 84th Plenary Session of Indian National Congress at the Indira Gandhi stadium in New Delhi on Sunday. (PTI Photo)

Former finance minister and senior Congress leader P Chidambaram on Sunday described demonetisation as a big lie and accused the Modi government of derailing a strong economy it inherited from the UPA through its reckless policies.

The Congress was scathing in its assessment of the government in a resolution it moved on the second day of the party’s 84th plenary, saying the economy was being managed by “ignorant and incompetent policy makers”.

“The economy is in the hands of ignorant and incompetent policy makers who have derailed economic growth through reckless and bizarre policies such as demonetisation and a hasty imposition of a flawed goods and services tax (GST) regime,” the resolution moved by Chidambaram said.

He counted the mismanagement of the economy as the biggest failure of the Modi government.

It had led to the collapse of the manufacturing sector, destruction of micro, small and medium businesses, paralysis of India’s banking sector, a severe dent in business confidence and rising inflation expectations of households, the resolution said.

“The task of development has to be continued by future generations. However, today, the Indian economy is decoupled from the world economy which is growing,” Chidamabaram said.

The view were shared by former prime minister Manmohan Singh, who earlier in the day accused the government of messing up the economy.

Like Singh, Chidamabaram, too, tore into the government over its November 2016 decision to discontinue rupee 500 and 1,000 banknotes.

“Demonetisation was a big lie. RBI is still counting and won’t tell us how much money has come back. I would like to advice the RBI governor to go to Tirupati and get the hundi collectors. They count money faster than the RBI,” Chidambaram said.

The Reserve bank of India has not yet given the amount of demonetised currency returned to the banks after the scrapping of high-value notes.

As on November 8, 2016, there were 1,716.5 crore pieces of Rs 500 and 685.8 crore pieces of Rs 1,000 notes in circulation, totalling Rs 15.44 lakh crore.

Replying to a right to information query, the central bank said in February the notes were still being “processed for their arithmetical accuracy and genuineness”.

The Modi government had a golden opportunity in robust global economic growth and an absolute majority in the Lok Sabha to catapult India’s economic growth to a new high. “Sadly, the government has squandered a golden opportunity,” the resolution said.

The “abysmal economic management” of the government had resulted in the lack of jobs and stagnant real incomes of farmers, the resolution said.

(With agency inputs)

First Published: Mar 18, 2018 16:38 IST