Manmohan, Jaitley spar over effects of demonetisation

9:38 AM, Friday, November 25th, 2016

Arun jaitleyNew Delhi: Political feud over demonetisation today showed no signs of ebbing away, with former Prime Minister Manmohan Singh calling it an “organised loot and legalised plunder” that would cause GDP to slide by 2 per cent, a contention rejected by Finance Minister Arun Jaitley who said it will have a positive impact.

Delhi Chief Minister Arvind Kejriwal, one of the most vocal critics of the measure, decided to take the battle to poll-bound Uttar Pradesh beginning December 1 to expose the “Rs 8 lakh crore scam”. He will address three rallies at Meerut, Lucknow and Varanasi, the parliamentary seat of Prime Minister Narendra Modi where he had defeated Kejriwal in the 2014 polls by a massive margin of 3.37 lakh votes.

Former Prime Minister Manmohan Singh, who was fielded by the Congress to take on the government, called the exercise, which has caused immense hardships to the ordinary people, a “monumental management failure” and a case of “organised loot and legalised plunder.”

In an uncharacteristically hard-hitting speech made in the Rajya Sabha in the presence of Modi, the economist- politician said the drive will result in a decline of 2 per cent in GDP and went ahead to warn that it cound be an “under estimatation”.

“These measures convinced me that the way the scheme has been implemented, it’s a monumental management failure. And, in fact, it is a case of organised loot and legalised plunder.

“It is not my intention to pick holes what this side or other side does. But I sincerely hope that the PM even in this late hour will help find us practical and pragmatic ways to provide relief to the suffering of the people of this country,” a usually reticent Singh said, attacking the Modi dispensation.

Singh claimed agriculture, the unorganised sector and small industries have been hit hard by demonetisation and people were losing faith in the currency and banking system.

“My own feeling is that the national income, that is the GDP of the country, can decline by about 2 percentage points as a result of what has been done. This is an under estimate and not an over estimate.

“Therefore, I feel the Prime Minister must come with some constructive proposal on how we can implement the scheme and at the same time prevent the distrust that has been caused to the common people,” Singh said.

Finance Minister Arun Jaitley would, however, not buy the Congress veteran’s argument and mounted a counteroffensive, saying it is no surprise that he is unhappy as “maximum blackmoney was generated” under his rule.

Rejecting Singh’s contention that GDP growth will plunge by 2 per cent, he said demonetisation will have a positive impact on the economy over medium to long term as the money from shadow economy will find its way into the mainstream.

“Those who did not consider the generation of so much black money and scams during their regime as blunder are now finding the crusade against black money as blunder,” Jaitley told reporters.

Lashing out at Singh, who headed the decade-long UPA dispensation, Jaitley alleged, “The maximum black money was generated during 2004-14 which was engulfed in various scams like 2G and coal scam. We are not surprised that they did not like the anti-black money measures the government has taken”.

Claiming that demonetisation of high-value Rs 500 and Rs 1000 currency notes will have a “positive” impact on the economy, he said the measure will increase lending capacity of banks which could extend the money to farmers, social sector and also industry.

Seeking to bring out the contrast between the UPA and the current NDA dispensations, the Minister said the previous government was plagued by “policy paralysis” and could not take “tough decisions” like those being taken under Modi.

NDA ally Shiv Sena, which has been doing a flip-flop on the issue, joining West Bengal Chief Minister Mamata Banerjee’s Rashtrapati Bhawan march on November 16, but not participating in opposition protest outside Parliament yesterday, still taking digs at the Modi government all the while, today called demonetisation drive “extortion of the common man”.

Sena chief Uddhav Thackeray said Singh’s words have to be taken seriously as he was a “renowed economist”.

“I will not hesitate in taking a critical stand on the way in which demonetisation was implemented,” Thackeray told reporters in Mumbai.

“The way in which a referendum was sought in Britain before its withdrawal from the European Union, a survey is being done here. But seeing people’s response, their (UK) Prime Minister chose to step down. Will something similar happen here?” he said, apparently referring to Modi seeking public feedback on the exercise on Narendra Modi App.

“Former Prime Minister Manmohan Singh is a renowned economist. Thus, his words and opinions should be taken seriously. The way in which money is being collected, seems that money is being extorted from common man. You have brought tears in the eyes of people who helped you come to power with a lot of hope,” Thackeray said, adding “one person cannot decide for 125 crore people, who should have been taken into confidence”.

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