Former Governor of the Reserve Bank of India and Member of Parliament, Bimal Jalan has lashed out at demonetisation and said that it has failed.
Speaking to The Telegraph, he said; “There cannot be two views on the fact that demonetisation hasn’t worked.”
He added that the goals set out by the PM in his announcement on November 8, 2016, had just not been met; “When it was launched there was tremendous uncertainty about whether it would be able to reduce the volume of black money effectively over time.”
Jalan, who two years ago had called for a “wait and watch” policy on demonetisation, now has changed his tune and emphasised it had hit the poorest the hardest; “As is now clear, the impact of demonetisation was particularly negative for small and medium sectors, as well as the unorganised sector.”
Bimal Jalan has otherwise been a supporter of the Modi government’s economic policies and of “strong” governments. So his unambiguous statement on the failure of Demonetisation would come as a blow to the Modi government, which is now anxious to talk it up as a “success”.
The Modi government has been under tremendous pressure on its inability to deliver jobs, its economic mismanagement and fall in all measures of prosperity. Open criticism from its allies has been mounting.
BJP MP Subramanian Swamy in The Hindu on November 17 was particularly harsh on its policies, saying there would be a “real crisis” if policies were not changed. and openly taunted the regime for its failed implementation of the Goods and Services Tax or GST calling it “a flop”. He wrote; “criticised the management of the economy under the Modi government.
“Hence, no amount of quoting foreign agencies such as the International Monetary Fund, or international events in explanations will help address the crisis that is looming unless we initiate major economic reforms that are credible and incentive-driven for the people. We therefore need a reality check today,” he wrote.
Modi and others in the government have cited reports in international agencies to claim the Indian economy was booming.
Attacking the GST, he wrote: “Despite my protest, it was introduced much as a carnival in Parliament, with gongs reverberating.”
In an unusual move, the same evening, Finance Minister Arun Jaitley bid goodbye to Finance Secretary Hasmukh Adhia. This top Finance Ministry official form Gujarat, is seen as the architect of the GST roll-out, and is set to retire on November 30. It is usually expected that senior officials in the Ministry who are set to retire within three months of the Union Budget being presented are asked to stay on till at least the budget is done. Now, with just two months for the Budget, Jaitley bidding the PM’s handpicked official a firm farewell has given a clear indicator of the panic and unease within government on the economy.