According to the Managing Director of HDFC Bank, Aditya Puri, demonetisation should be looked at from a long-term perspective and that too from the prism of a must-achieve goal for India, and that is of turning it into a cashless economy’. Speaking in an interview to the Business Standard, he said that as per the present scenario, demonetisation shouldn’t be looked at as a single and standalone event.
He ridiculed many economists’ theory as baseless who said India’s economy will grow at a crawling pace and dip 50-200 basis points. “I think it is absolute nonsense. How many times have analysts and economists been right? Some people say GDP will become 2%, some say 6%. The question is how do they know GDP will fall?” said Puri. This comment flies in the face of what former PM Manmohan Singh said in Parliament. The ex-PM had voiced fears that demonetisation may well shave off 2% of country’s GDP.
Puri said that, considering the mammoth nature of the exercise, there is bound to be ‘temporary aberration’ at the banks as of now. He stressed on the point that the government will most likely look to curb ‘excess cash’ from the system by applying measures such as the 100 percent CRR (Cash Reserve Ratio). He said once things settle, the RBI could ease the CRR.
Puri sympathised with the general public, saying problem is evident, as the decision on demonetisation was taken suddenly, keeping it a secret virtually to the last moment.