1. Why Raghuram Rajan never supported Narendra Modi’s demonetisation decision

Why Raghuram Rajan never supported Narendra Modi’s demonetisation decision

Former RBI governor Raghuram Rajan has made some stunning revelations about demonetisation in his book 'I Do What I Do: On Reforms Rhetoric and Resolve' which is due to release next week.

By: | New Delhi | Published: September 3, 2017 9:57 AM
Raghuram Rajan, Raghuram Rajan rbi, Raghuram Rajan on demonetisation, Raghuram Rajan on modi, Raghuram Rajan modi, narendra modi, pm modi, prime minister narendra modi, india news, latest news Former RBI governor Raghuram Rajan has made some stunning revelations about demonetisation in his book ‘I Do What I Do: On Reforms Rhetoric and Resolve’. (Source: PTI)

Former RBI governor Raghuram Rajan has made some stunning revelations about demonetisation in his book ‘I Do What I Do: On Reforms Rhetoric and Resolve’ which is due to release next week. In this book, Rajan has revealed that he wasn’t in support of the demonetisation as he believed that short term cost of the decision will far outweigh any long term benefits. According to a report by TOI, Rajan said that he had warned the government about the short-term costs of demonetisation which might outweigh the long-term benefits.

The former Reserve Bank of India governor added that he had suggested alternatives to achieve the goal of stamping out black money. “The RBI flagged what would happen if preparation was inadequate,” wrote Rajan, who returned to University of Chicago Booth School of Business as faculty after his term as governor ended.

The Narendra Modi government had demonetised old Rs 500 and Rs 1000 currency notes on November 8 last year. The decision was taken in order to curb the use of black money in India but the untimely execution led to a lot of chaos and trouble. The RBI had replaced the old Rs 500 notes with the new ones while Rs 1000 notes were completely taken out of the system. Instead, new Rs 2000 notes were introduced. The Opposition parties have time and again attacked BJP and PM Modi on this issue.

Last week, the Reserve Bank of India had released data related to demonetisation in its annual report. It was revealed that out of 632.6 crore pieces of Rs 1,000 currency notes in circulation, 8.9 crores have not been returned post the note ban last November. This means that only 1.4% of the old Rs 1000 notes have not come back.

The RBI said that old notes worth Rs 15.44 lakh crore were there in the market, out of which 15.28 lakh crore have been received by the bank. The report further mentioned that 7.62 lakh pieces of counterfeit currency notes were detected in FY’17 as against 6.32 lakh in FY’16. However, what came as a major setback for the government is that the cost of printing notes doubled to Rs 7,965 cr in FY’17 from Rs 3,421 cr in FY’16 on account of new currency printing post note ban.

  1. Jayesh Sheth
    Sep 4, 2017 at 9:08 am
    because he is a knowledgeable person.
    Reply
    1. A
      Abdul Pasha
      Sep 3, 2017 at 5:26 pm
      Congress bootlicker one of the biggest hiya of India 😡
      Reply
      1. Y
        Yash Pal
        Sep 3, 2017 at 11:04 am
        Rajan was being hounded out of RBI was very clear when BJP turned Swamy on him and it must have been because of DeMo became clear by Mid Nov. But DeMo achieved its unstated objective, to win UP for BJP. DeMo is never an economic decision, always a political one.
        Reply
        1. R
          rohan
          Sep 3, 2017 at 10:54 am
          Fools do not take advise from wise people. Fools like taking advise from i diots only !
          Reply
          1. A
            Abdul Pasha
            Sep 3, 2017 at 5:30 pm
            I believe you are referring corrupt Congress as fools including hiya Sonia bootlicker Raghu😑
            Reply
          2. R
            rohan
            Sep 3, 2017 at 10:53 am
            Fools do not take advise from wise people. Fools like taking advise from s only !
            Reply
            1. Rabindra Nath Roy
              Sep 3, 2017 at 10:37 am
              Narendra Modi, does not listen, he talks. The famous saying possibly in recent time that Modi said was "it is hard work, not Harvard" that succeeds and this was in the context of the figures that he reeled out on demonitisation which proved to be incorrect post RBI report. Thanks God the present Governor of RBI could not manipulate the figures to suit Modi's figures and ultimately prove that Modi is right. The figures are there to see for everyone which speaks for itself what Modi and his corts cannot see is that they made a economic b er which paid them very good political dividend. The Dividend pay out of the RBI to the Govt. of India has halved from the last year's and yet Modi is trying his tricks to make RBI pay more, who know Urjit Patel would succumb to that as well. The Golden era of RBI under the Governorship of Raghu Ram Rajan and his outstanding role did expose the Politician of whom in his one of the speech b ed the crooks. Grateful for book.
              Reply
              1. Nandkishore Mestry
                Sep 3, 2017 at 8:30 pm
                RBI report doesnt indicate failure or success of demonetization. Unlike demonetization of pre-2005 notes that was carried out in Jan 2014 to Jul - 2014, this time government demanded to submit PAN card with every submission of money. Which will help tracing the source of credited money. And this is exactly what differs from demonetization carried out by UPA where there was absolutely no proofs were asked during submission of pre-2005 notes of Rs. 500 1000. Due to which even till date nobody in India knows how much black money (Money that hasnt been taxed) was got replaced. That was biggest fair lovely scheme ran by UPA govt. But this time government can classify the deposits as PAN details are available. And can question depositor wherever discrepancy is observed. Its too early to say that demonetization is failed.
                Reply
              2. Ashok Gupta
                Sep 3, 2017 at 10:30 am
                A Congress Stooge who never supported Modi. He was more a politician than RBI Gov.
                Reply
                1. A
                  Abdul Pasha
                  Sep 3, 2017 at 5:31 pm
                  Agree, a perfect corrupt congress agent who ruined Indian economy during his tenure
                  Reply
                  1. V
                    vijju
                    Sep 3, 2017 at 6:37 pm
                    people like you sorry a fool can never understand the difference between a IIM graduate and chai wala.good bye
                    Reply
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