Ramifications of note ban still unravelling: Manmohan

On the second anniversary of demonetisation, former Prime Minister Manmohan Singh on Thursday said the “scars and wounds” of the “ill-thought” decision were becoming more visible with time and cautioned the Narendra Modi government against resorting to unorthodox economic measures.

In a hard-hitting statement, Singh said the second anniversary of demonetisation was a day to remember how economic misadventures can roil the nation for a long time and understand that economic policymaking should be handled with thought and care.

“It is often said that time is a great healer. But unfortunately, in the case of demonetisation, the scars and wounds of demonetisation are only getting more visible with time,” Singh said.

He said beyond the steep drop in headline GDP growth numbers after demonetisation, the deeper ramifications of 'notebandi' were still unravelling.

The former prime minister said the full impact of demonetisation was yet to be understood and experienced. “With a depreciating currency and rising global oil prices, macroeconomic headwinds are also starting to blow now,” he said.

Singh said note ban had a direct impact on employment as the economy continues to struggle to create enough new jobs for the youth.

“The financial markets are volatile as the liquidity crisis wrought by demonetisation is taking its eventual toll on infrastructure lenders and non-bank financial services firms,” he said.

“It is therefore prudent to not resort to further unorthodox, short-term economic measures that can cause any more uncertainty in the economy and financial markets,” Singh added.

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