Accept demonetization was a blunder, time to rebuild economy: Manmohan Singh to PM Narendra Modi

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Former prime minister Dr. Manmohan Singh urged PM Narendra Modi to rebuild the economy after the demonetization blunder. In an interview to BloombergQuint, Manmonhan Singh said, “The impact of demonetisation on the society’s weaker sections and business was far more damaging than what economic indicators reveal”.

Manmohan Singh’s statement came just a couple of days before the anniversary of demonetization, which opposition parties are planning to observe as a black day.

Terming the demonetization decision as “an attack on the independence and credibility of the RBI as an institution”, the former prime minister asked PM Modi to accept his mistake and “work towards consensual policy solutions to rebuild the Indian economy”.

 “I strongly feel the time for politicking over demonetisation is over,” Manmohan Singh said.”It is time the prime minister graciously acknowledges the blunder and seeks support from all to rebuild our economy”, he added.

Expressing his disapproval, he said, “Demonetisation has also caused reputational damage to India as a peaceful and stable nation for economic policy”.

However, the former prime minister called the Modi government’s drive to encourage digital transactions across the country a “laudable pursuits”.

Praising government’s efforts to formalise the informal economy in the country through various methods including the rolling out of the Goods and Services Tax and demonetisation, Singh said: “If formalisation of the informal sector means widening of the tax base, it should be welcomed. But the means is as important as the ends.”

“GST is certainly an idea in that direction to widen the tax base but the implementation of it is threatening to derail the informal sector entirely,” he said.