New Delhi: Former Prime Minister Dr Manmohan Singh stated that both demonetization and Goods and Services Tax (GST) have had some impact on India’s Gross Domestic Product (GDP) growth.
He said: “Both demonetisation and the GST have had some impact. Both would affect the informal sector, the small scale sector. The sectors today are responsible for 40 per cent of GDP.”
Dr Singh’s statement has come in the backdrop of India’s slowest economic growth in last three years. The country recorded 5.7 per cent GDP growth during April-June. The previous low of 4.6 per cent was recorded in January-March 2014.
Former Prime Minister put the blame on the demonetisation and GST for the current economic slowdown and said: “The withdrawal of 86 per cent of currency plus 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.” He further said that the informal and small scale sectors were badly hit by the demonetisation.
This is not the first time when Dr Manmohan Singh criticized the Centre’s demonetisation move. Soon after the announcement of note ban, the Former Prime Minister in the Parliament called it an ‘organised loot and legalised plunder’ that would bring the GDP growth down by 2 per cent.
“In my opinion that the way the scheme (demonetisation) has been implemented will hurt agricultural growth in our country, will hurt small industry, will hurt all those people who are in the informal sector of the economy. And my own feeling is that the national income, that is the GDP, can decline by about 2 per cent as a result of what has been done. This is an underestimate,” Dr Singh had said.
Earlier in June, Dr Singh had also talked about the decline in the economic growth and expressed serious concern over the situation, particularly the impact of the growth slowdown on job creation.
“Private sector investment has collapsed and the economy is running on just one engine of public spending,” he said at the Congress Working Committee meeting. “The most worrisome aspect of all this is the impact on job creation. Jobs have been extremely hard to come by for the youth of the nation,” he said.