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Day before the first anniversary of demonetisation, former prime minister Dr Manmohan Singh goes all out to trash successor Narendra Modi’s economic reform agenda

A day before a unified Opposition marks the first anniversary of Prime Minister Narendra Modi’s demonetisation as a ‘black day’, former prime minister and Congress veteran Dr Manmohan Singh hit out at the Centre over its economic reforms agenda, lashing out at his successor over the issues of noteban, Goods and Services Tax (GST) and even the bullet train.

Addressing traders and businessmen in Ahmedabad on Tuesday, the ‘economist’ former prime minister trashed Modi’s demonetisation initiative as a “disaster” and a “reckless step on our nation” that was taken by his successor only to “reap political benefits”. Dr Singh reiterated that demonetisation was “an organised loot and legalized plunder”.

However, it wasn’t just demonetisation that Dr Singh, who is credited with ushering in economic reforms in India during his stint as finance minister under the PV Narsimha Rao-led Congress government and then setting off the country on a high growth trajectory during his own stint as prime minister, attacked the Modi government over.

In a strongly worded and uncharacteristically curt address, the mild-mannered Congress leader also brought the Modi government GST rollout and the Prime Minister’s ambitious Mumbai-Ahmedabad bullet train project in his line of fire.

The former prime minister’s combative critique of the Modi government’s economic policy and reforms agenda forced Union finance minister Arun Jaitley to defer his media briefing that was scheduled for 12.30 pm on Tuesday – the same time when Dr Singh’s address began in Ahmedabad – to 3.30 pm. And when Jaitley finally got his chance under the sun, his briefing was reduced to a firefighting exercise; one in which he spent a better part of his time defending the demonetisation move against Dr Singh’s strident attack.

Calling demonetisation and GST as “twin blows” on the Indian economy, Dr Singh said that the two initiatives of the Modi government only ended up helping China while they wreaked havoc in the lives of Indian citizens. “Due largely to demonetisation and GST, India’s imports from China in the first half of 2017-18 increased by 23 per cent or Rs. 45,000 crore, from Rs.1.96 lakh crore to Rs. 2.41 lakh crore,” Dr Singh said, adding: “these twin blows damaged India’s MSME sector and our businesses had to turn to Chinese imports at the cost of Indian jobs.”

The former prime minister added: “with immense pain and a sense of deep responsibility I declare that the 8th of November was a ‘black day’ for our economy and indeed our democracy. I remember feeling shocked when I heard the Prime Minister’s announcement (of demonetisation) and I wondered who advised him to inflict such a reckless step on our nation, and whether any considered thought went into it.”

Asserting that no democracy in the world had taken such a “coercive” move – of withdrawing 86 per cent of legal tenders in one single swoop – Dr Singh said the decline in the GDP growth rate to 5.7 per cent was largely due to demonetisation even as he suggested that GDP figures too were a “gross underestimate as the pain of the informal sector is not adequately captures in GDP calculation”.

“Every one per cent loss of GDP annually costs our nation Rs. 1.5 lakh crore. Think of the human impact from this lost growth — the lost jobs, the youth whose opportunities have vanished, the businesses which had to shut down and the entrepreneurs whose drive to succeed has turned into discouraged disappointment,” Dr Singh said.

The former Prime Minister went on to add that “what is even more tragic is that none of the lessons from this monumental blunder (of demonetisation) have been learnt by the government, which, instead of providing relief to the needy, chose to inflict on them a badly designed and hastily implemented GST,” Dr Singh said, adding that the “twin blows of demonetisation and GST have been a complete disaster for the Indian economy.”

Dr Singh also claimed that the aftermath of GST rollout and noteban had spread a sort of “tax terrorism” in India.

“At a time when the economy has slowed down considerably, despite favourable global economic conditions, the fear of tax terrorism has eroded the confidence of businesses to invest. As you know, the growth in private investment is at a 25-year low. This is terrible for India’s economy,” Dr Singh said.

“Did the Prime Minister (Narendra Modi) stop to consider the wisdom of the Mahatma while asking the RBI Governor to sign on the dotted line or while implementing the GST in haste? Did he think about the impact on those who toil in the informal sector whose earnings dried up because of shortage of cash? Did he think about the millions of people who lost jobs and had to return to their villages in despair? If the Prime Minister had paid attention to the Mahatma’s talisman, the poor of India would not have suffered the way they did,” Dr Singh added.

The Congress leader also hit out at Modi over the Mumbai-Ahmedabad bullet train project calling it “an exercise in vanity” and wondering if the Prime Minister had considered the alternative of “a high speed train by upgrading broad gauge railway?”

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