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Numbers don’t lie, Manmohan Singh was right about impact of Modi’s demonetisation on economy
India is no longer the fastest growing economy, thanks to Modi-government's 'masterstroke'.
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In March quarter, the GDP growth was the slowest in the last two years. India’s GDP during the past fiscal grew at 7.1 per cent, which is much slower than 8 per cent in 2015-16. In terms of Gross Value Added (GVA), which excludes indirect taxes, the growth came in even lower at 5.6 percent over the GVA for 2015-16. Notably, all this is happening a few months after Modi government’s decision to discontinue old Rs 500 and Rs 1,000 denomination notes.
Finance Minister Arun Jaitley, however, played down the impact of demonetisation on economic growth, saying the annual rate of growth was “very reasonable”. But Congress leader and former Finance Minister P Chidambaram was not surprised by the decline in economic growth. “I had said demonetisation will affect growth by 1-1.5 per cent. Spot on. GVA down by 1.3 per cent,” said Chidambaram on his official Twitter account. “Economy began slowing down in July 2016. Demonetisation made it worse,” he added.
Similar remarks were made by Manmohan Singh right after the demonetisation was announced. “…I would further like to point out that in my opinion that the way the scheme has been implemented will hurt agricultural growth in our country, will hurt small industry, will hurt all those people who are in the informal sector of the economy. And my own feeling is that the national income, that is the GDP, can decline by about 2 per cent as a result of what has been done. This is an underestimate, not an overestimate,” Manmohan Singh had said in Rajya Sabha.
In a column which appeared in the Hindu on December 9, a month after the demonetisation, Manmohan Singh had said note ban would ’cause grievous injury to the honest Indian who earns wages in cash.’ “It is my humble opinion that we as a nation should brace ourselves for a tough period over the coming months, needlessly so,” Dr Singh had warned. Months later, all his words are coming to haunt the Modi-government. Manmohan Singh was right in predicting slow growth of economy and demonetisation made it worse. But no one in the Modi-government paid heed and the consequences are before us.
The March quarter GDP figure in the last fiscal has come down to 6.1 per cent. The corresponding GDP figure in the previous fiscal was 7.9 per cent. So, the decline is nearly 2 per cent point, as predicted by Manmohan Singh. And numbers don’t lie. With 6.1 per cent, India’s economic growth was also lower than China’s growth of 6.9 percent for the first three months of 2017. India is no longer the fastest growing economy, thanks to Modi-government’s ‘masterstroke’.
http://www.india.com/news/india/num...t-of-modis-demonetisation-on-economy-2191172/
India is no longer the fastest growing economy, thanks to Modi-government's 'masterstroke'.
1.7kShares
Comments
In March quarter, the GDP growth was the slowest in the last two years. India’s GDP during the past fiscal grew at 7.1 per cent, which is much slower than 8 per cent in 2015-16. In terms of Gross Value Added (GVA), which excludes indirect taxes, the growth came in even lower at 5.6 percent over the GVA for 2015-16. Notably, all this is happening a few months after Modi government’s decision to discontinue old Rs 500 and Rs 1,000 denomination notes.
Finance Minister Arun Jaitley, however, played down the impact of demonetisation on economic growth, saying the annual rate of growth was “very reasonable”. But Congress leader and former Finance Minister P Chidambaram was not surprised by the decline in economic growth. “I had said demonetisation will affect growth by 1-1.5 per cent. Spot on. GVA down by 1.3 per cent,” said Chidambaram on his official Twitter account. “Economy began slowing down in July 2016. Demonetisation made it worse,” he added.
Similar remarks were made by Manmohan Singh right after the demonetisation was announced. “…I would further like to point out that in my opinion that the way the scheme has been implemented will hurt agricultural growth in our country, will hurt small industry, will hurt all those people who are in the informal sector of the economy. And my own feeling is that the national income, that is the GDP, can decline by about 2 per cent as a result of what has been done. This is an underestimate, not an overestimate,” Manmohan Singh had said in Rajya Sabha.
In a column which appeared in the Hindu on December 9, a month after the demonetisation, Manmohan Singh had said note ban would ’cause grievous injury to the honest Indian who earns wages in cash.’ “It is my humble opinion that we as a nation should brace ourselves for a tough period over the coming months, needlessly so,” Dr Singh had warned. Months later, all his words are coming to haunt the Modi-government. Manmohan Singh was right in predicting slow growth of economy and demonetisation made it worse. But no one in the Modi-government paid heed and the consequences are before us.
The March quarter GDP figure in the last fiscal has come down to 6.1 per cent. The corresponding GDP figure in the previous fiscal was 7.9 per cent. So, the decline is nearly 2 per cent point, as predicted by Manmohan Singh. And numbers don’t lie. With 6.1 per cent, India’s economic growth was also lower than China’s growth of 6.9 percent for the first three months of 2017. India is no longer the fastest growing economy, thanks to Modi-government’s ‘masterstroke’.
http://www.india.com/news/india/num...t-of-modis-demonetisation-on-economy-2191172/
