Renowned economist and Niti Aayog member Bibek Debroy has slammed the critics of Modi government’s demonetisation drive, including former PM Manmohan Singh and ex-World Bank chief economist Kaushik Basu. In an interview to India Today, Debroy said that Dr Manmohan Singh has been the PM for a decade and has more expertise in on the issues of loot and plunder. “He (Manmohan Singh) has been prime minister for 10 years, he has far more expertise on organised loot and legalised plunder. So I would not like to comment on what he has said, let’s move on to the more substantive issue. I have a great deal of respect for him and and I have a great deal of respect for his expertise in those two expressions,” Debroy said.
His remarks came after the Manmohan Singh had in Parliament said that the Modi government’s demonetisation move is “organised loot, legalised plunder of the common people”. “…these measures convince me that the way this scheme has been implemented is a monumental management failure, and in fact, it is a case of organised loot, legalised plunder of the common people,” Manmohan Singh had said. Singh had also predicted that India’s GDP can decline by about 2% as a result of demonetisation and its poor implementation. Singh had also questioned the benefit of such a painful exercise.
Countering that argument, Debroy said that the gains would not be limited to the amount of black money that would be rendered useless, but also extend to government’s massive revenue generation. This, Debroy said, would help the government spend massive amount of money on building public goods and making more public services available.
Debroy has also said that critics are unaware of the situation on ground, the extent of financial inclusion that has been undertaken by the Modi government, and how the revenue generated will help in enhancing public investment. Debroy told PTI that economists who live out of India normally do not have accesss to the latest data, and are hence more prone to drawing conclusions that may not hold true in the present situation. “They (economists living abroad) base their understanding essentially on reading English newspapers. Otherwise, how would they know? English language newspapers understood many things wrongly,” PTI quoted Debroy as saying.
Watch: Full interview of Bibek Debroy on demonetisation
Debroy’s statement came after Kaushik Basu’s remark that demonetisation was not ‘good economics’ and would cause great ‘collateral damage’ “Where does Dr Basu work now? He is based in US. I have a great deal of respect for him…That someone who is away from India may not necessarily be aware what is happening in India,” Debroy said, adding that with the PM Jan Dhan Yojana a lot of people now have access to the banking system – a fact that Debroy feels Basu may not be aware of.
The government’s move to withdraw the old Rs 500 and Rs 1000 notes from circulation and introduce new ones has divided economists, both domestic and global, into two camps – those who are calling it a bold step and others who are raising doubts over its benefits.