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Manmohan Singh Death News: Even as then Union finance minister Arun Jaitley called the move a big help in tackling tax evasion, the former PM said that scars and wounds of demonetisation are only getting more visible with time.
Manmohan Singh, who served as prime minister for two terms from 2004 to 2014, has been credited with spearheading India’s economic reform process. (File photo)
Former prime minister Manmohan Singh, who is hailed as the architect of India’s economic reforms, on many occasions shared his scathing assessment of demonetisation that banned higher currency notes in 2016.
Even as then Union finance minister Arun Jaitley called the move a big help in tackling tax evasion, the former PM said, “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.”
Strongly defending Prime Minister Narendra Modi’s overnight ban on Rs 500 and 1,000 notes on November 8, 2016, Jaitley had said that the extra resources from increased tax collection had been used in infrastructure, social sector and villages.
The former finance minister argued that demonetisation compelled people to deposit cash – which involves anonymity in transactions and enables tax evasion – in banks.
“Confiscation of currency was not an objective of demonetisation. Getting it into the formal economy and making the holders pay tax was the broader objective. The system required to be shaken in order to make India move from cash to digital transactions. This would obviously have an impact on higher tax revenue and a higher tax base,” Jaitley had written in a Facebook post in 2018.
The ex-FM said demonetisation, along with GST or Goods and Services Tax, had curbed cash transactions in a big way.
Despite the defence, Manmohan Singh, who was soft-spoken and often labelled “silent PM” by critics, voiced his concern over “ill-fated and ill-thought exercise” of cash ban.
“The havoc it unleashed on the Indian economy and society is now evident to everyone,” he had said, adding that the cash ban impacted every single person, regardless of age, gender, religion, occupation or creed.
Here Are Other Quotes By Manmohan Singh on Demonetisation
• In 2017, at the Indian School of Business (ISB) Leadership Summit in Mohali, Manmohan Singh said, “I don’t think demonetisation was at all required… I don’t think it was technically, economically necessary to launch this adventure.”
• On the second anniversary of the cash ban, he had said, “Beyond the steep drop in headline GDP growth numbers after demonetisation, the deeper ramifications of note-bandi are still unraveling. Small and medium businesses that are the cornerstone of India’s economy are yet to recover from the demonetisation shock.”
• Singh, while speaking in Rajya Sabha in 2016, castigated the government saying that the demonetisation was a “monumental management failure” and a case of “organised loot and legalised plunder.” Referring to those saying that the move which was doing harm and creating distrust in the short run was good in the long run, the former PM quoted John Maynard Keynes to say that “in the long run, all of us are dead”.
• In 2017, during an interaction with college students in Kerala, Manmohan Singh said that note ban was not the appropriate response to tackle black money in the country. A better way to counter the issue would be by simplifying our tax system, land registration system and administration, he had said. The former PM had said the shock from the demonetisation has resulted in the slowing down of the economic growth from 7.2 per cent in 2015-16 to 5.7 per cent in the first quarter of 2017-18.
