Former prime minister Manmohan Singh once again warned of sharp fall in the GDP, saying that the hasty implementation of the GST and the demonetisation are bound to affect the economic growth adversely. In an interview to CNBC-TV18, Manmohan Singh said, “Both demonetisation and GST have had some impact. GST was put on practice in haste, and there are a lot of glitches which are now coming out.”
The GDP for the first quarter (April-June) of financial year 2017-18 slumped to a three-year low at 5.7 per cent, far lower than 7.9 per cent recorded in the same quarter last year. The former prime minister had predicted a fall of 2 per cent in GDP in the aftermath of the demonetisation exercise in the Parliament in November last year. He had called the demonetisation exercise a monumental disaster, organised plunder and legalised loot.
After ten months of the demonetisation exercise, Manmohan Singh, once again, holds it, along with hasty implementation of the GST, responsible for badly affecting the informal and the small scale sector, which account for ninety per cent of employment in India.
“Both (demonetisation and GST) would affect the informal sector, the small scale sector. These factors today are responsible for GDP fall. Ninety per cent of our employment is informal sector, and the withdrawal of 86 per cent of currency, also the GST because it was put on practice in haste, are bound to affect the GDP growth adversely,” Manmohan Singh told CNBC-New18.
Even though in April, when the GST bill was passed in the Parliament, Manmohan Singh hailed it as a “game-changer”, he did not forget to caution the country from the difficulties in its implementation.
On August 30, the Reserve Bank of India said that nearly 99 per cent of junked Rs 500 and Rs 1,000 notes have returned to the banking system, raising questions on the efficacy of the government’s note ban decision.