Falling GDP growth: Manmohan Singh says demonetisation hit India hard; Arun Jaitley lists out achievements

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New Delhi | Updated: September 19, 2017 11:38:26 AM

Former Prime Minister Manmohan Singh has taken a dig at PM Narendra Modi and BJP-led government at the Centre saying the demonetisation move and decision to implement GST hastily have adversely affected the country's GDP growth.

Manmohan Singh, Arun Jaitley, demonetisation, GDP, pm narendra modi, manmohan singh news, arun jaitley, jaitley, GST, Goods and Service Tax, note ban, GDP, GDP growth, tax, indian economyFormer Prime Minister Manmohan Singh has taken a dig at PM Narendra Modi and BJP-led government at the Centre saying the demonetisation move and decision to implement GST hastily have adversely affected the country’s GDP growth. (PTI image)

Former Prime Minister Manmohan Singh has taken a dig at PM Narendra Modi and BJP-led government at the Centre saying the demonetisation move and decision to implement GST hastily have adversely affected the country’s GDP growth. Singh said that both demonetisation and the GST would affect the informal sector, the small-scale sector and these sectors were responsible for 40 per cent of GDP, according to CNBC-TV 18 report. Meanwhile, Finance Minister Arun Jaitley has once again pitched for the central government’s November 8 decision to scrap Rs 500 and Rs 1000. Listing out the real measures of success of demonetisation, Jaitley said the volume of digital transactions has increased, tax base has widened and circulation of high denomination currency was squeezed.

Singh had countered the government’s claim over the success of the demonetisation and GST. He said, “And the withdrawal of 86 per cent of currency plus also GST, because it has been put on practice in haste, there are lots of glitches which are now coming out. These are bound to affect the GDP growth adversely.” On the other hand Jaitley strongly rejected criticism against Demonetisation and GST, saying some circles have lack of understanding and measured the success of demonetisation with only how much money reached banks.

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“I have three red lines to measure the success of demonetisation. First, how much volume of cash that RBI prints are we able to squeeze over time. High denomination currency has already squeezed in terms of volume. The second test is that as its (demonetisation’s) consequence, how many assessees are we able to add and expand the tax base.The third measure would be the increase in digital transaction volumes,” FM Jaitley said at the launch of Google’s new digital payment app — Tez.

On January 9, Singh had said that Demonetisation will have a “very significant adverse effect” on the country’s GDP. Notably, PM Modi had in Parliament said one should learn the art of “bathing with a raincoat on” from Manmohan Singh as there was not a single taint on him despite so many scams having taken place during his regime.

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