Chidambaram: Demonetisation biggest scam of 2016, remonetisation a joke
Former Finance Minister P Chidambaram has said that the demonetisation move by the Modi government has slowed down Indian economy. Chidambaram termed demonetisation 'the biggest scam of 2016'.
Former Finance Minister P Chidambaram at a funciton in Mumbai. (Photo: Mayuresh Ganapatye/ India Today)
Mumbai,UPDATED: Feb 12, 2017 19:13 IST
Former Finance Minister P Chidambaram has accused the Modi government of arbitrarily implementing demonetisation last year in November. Chidambaram called it the "biggest scam of 2016."
Chidambaram said that demonetisation has slowed down Indian economy significantly. He said that the country was likely to grow by 6-6.5 per cent in the current fiscal. This is much lower than what was earlier predicted by the Central Statistical Organisation (CSO) and the Reserve Bank of India (RBI).
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Before demonetisation, the CSO and RBI had predicted a GDP growth rate of 7.1 per cent for 2016-17. But, now the RBI has revised the estimate at 6.9 per cent for the current financial year.
DEMONETISATION: WHAT CHIDAMBARAM SAID
- I am sorry to make the prediction that 2016-17 will end with growth (rate) between 6 and 6.5 per cent, a good one per cent down from the earlier estimate and that means a hit of Rs 1.5 lakh crore on GDP. The GDP this year is Rs 150 lakh crore, so one per cent hit is Rs 1.5 lakh crore.
- Somebody hit an idea in his head, he decided to go on television and announce demonetisation, and the hit is Rs 1.5 lakh crore (on GDP). The growth rate in financial year 2017-18 will be same at around 6-6.5 per cent.
- Even 2017-18 will not see a growth higher than what we have in 2016-17 as the world economy is not benign anymore and we have an unpredictable man sitting in the White House. The GDP growth would continue to be at the same levels in 2018-19 financial year as well.
- Sooner than later the government will realise the folly of demonetisation. You first demonetise and then say we are remonetising. What is this joke?
- Rs 15.44 lakh crore worth of currency was demonetised overnight and now the government is printing notes to bring back Rs 15.44 lakh crore of notes.
- Taking away old notes and printing new notes will not put an end to corruption, or black money or counterfeiting. Full remonetisation will go up to June.
- After taking away Rs 15.44 lakh crore worth of currency, now the currency in circulation, including in the denominations of 100, 50, 20, 10 and the new 500 and 2,000 is now about Rs 9.5 lakh crore.
- To sustain an economy which is Rs 150 lakh crore, Rs 9.5 lakh crore is not enough and more money needs to be printed.
- By March, we should have about Rs 11 lakh crore of currency back in circulation and by June we would have Rs 15.44 lakh crore. This is a classic example of 'khoda pahad, nikli chuhiya' (Much ado about nothing).
- Chidambaram was speaking at a function in Mumbai today. He was in the city to campaign for the February 21 Brihanmumbai Municipal Corporation (BMC) polls.
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