Chidambaram reiterates failure of demonetisation, says India facing economic crisis

Former Finance Minister P. Chidambaram on Saturday branded the November 8 demonetisation drive as a 'bad decision'.

"Finally the RBI has agreed with what I said six months ago. Demonetisation was a wrong decision and the government should have the courage to accept it. Not one of the objectives of Prime Minister Narendra Modi has been fulfilled, be it countering fake currency, curbing black money or empowering economic growth," Chidambaram said while addressing a press conference of the Congress Party here.

The senior Congress leader opined that the 'notebandi' led to a setback of economic growth in the country, while citing reports of the declining GDP in the last six quarters.

 

"In terms of countering fake currency, we can see that even the new Rs. 2000 note was duplicated. Assuming fake currency was financing terrorism, the list of tragedies from Kashmir clearly reveals that the number of incidents has gone up since 2016. Demonetization has done nothing to curb black money. We have seen the amount of money hoarded and distributed during the RK Nagar by-polls in Tamil Nadu, which was caught by the Election Commission. There is nothing good that has come about in terms of corruption either, as it still exists in government offices. The Centre must be naïve if they still think that the economy is flourishing," he said.

With regards to the GDP numbers and the current slowdown, Chidambaram said that the fall in numbers may have continued in July, August and September, which will be reported in the quarterly numbers in November.

"India is facing an economic crisis. I will not be surprised if there is a decline in growth for seven successive quarters," said Chidambaram.

Analysing the Goods and Services Tax (GST), Chidambaram stated that the new tax regime is a 'flawed' version of the original tax, and has been implemented without adequate preparation.

"The GST implemented presently in India is not the tax itself. While the idea is good, the one being imposed in India is flawed. The rollout happened without preparation; it could have been pushed. We warned them about this but they didn't listen, and now the country is paying the price," he stated.

Citing the dismissal of the Labour, MSME and Skill Development Ministers from the Cabinet, Chidambaram stated that this shows acceptance of policy failures on behalf of the Centre.