In an attack that won’t go down well with the supporters of Prime Minister Narendra Modi and Bharatiya Janata Party, the Indian National Congress on Monday claimed the Union government’s demonetisation decision was akin to Pakistan’s unsuccessful attempts at hurting India’s development for decades.
“In one blow PM Modi has done what Pakistan tried to do, unsuccessfully, for decades — push India backwards!” the Congress said through its official Twitter handle. The party led by Sonia Gandhi and son Rahul Gandhi made this comment in the context of Indian Monetary Fund’s latest report that has trimmed India’s growth forecast for 2016 by one percentage point from 7.6% to 6.6%. The low forecast has been attributed to the “temporary negative consumption shock” and “payment disruptions” due to demonetisation.
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In another tweet, Congress claimed that IMF forecast was in line with former Prime Minister Manmohan Singh’s prediction that demonetisation would lead to a financial disaster in the country. “Dr. Manmohan Singh warned against the drop in the beginning of demonetization. The ego of an individual has pushed billion ppl into trouble!”
Speaking at ‘Jan Vedana’ conclave for Congress workers on January 11, Singh had said, “Demonetisation has hurt the country. Things have gone from bad to worse, but the worse is yet to come.” Quoting “some rating agencies”, Singh had also claimed the GDP would slow down to 6.6% due to demonetisation.
Singh, however, didn’t say if the “negative” impact of demonetisation would be a long-term phenomenon or end shortly as claimed by the Modi government. The latest reports by international organisations like the World Bank and the IMF have noted the short-term negative effects of demonetisation. However, they have predicted better days in 2017 and 2018. According to the latest IMF report, India will be the fastest-growing economy in the world in the next two years.
Dr. Manmohan Singh warned against the drop in the beginning of demonetization. The ego of an individual has pushed billion ppl into trouble! https://t.co/kO6RJaZN2Q
— INC India (@INCIndia) January 16, 2017
For markets like India, the IMF report suggests, “Emerging market and developing economies face starkly diverse cyclical positions and structural challenges. In general, enhancing financial resilience can reduce the vulnerability to a tightening of global financial conditions, sharp currency movements, and the risk of capital flow reversals.”
Interestingly, Modi government has defended demonetisation as an exercise in improving the financial resilience of the country. The Congress, however, thinks otherwise.