Demonetisation slowed down country’s growth, economy running on public spending: Manmohan Singh

Former Prime Minister Manmohan Singh and Congress President Sonia Gandhi on Wednesday said the country's growth has slowed down mainly due to demonetisation and the economy was running on just one engine of public spending.

The status of the economy was discussed at the meeting of the Congress Working Committee (CWC), the highest decision- making body of the main opposition party in Delhi.

Gandhi, who chaired the meeting, talked about the failure of demonetisation, saying it has affected the country's growth.

She highlighted that Manmohan Singh had predicted a fall in growth due to the note ban announced by Prime Minister Narendra Modi on November 8 last year.

She said the GDP figures proved that the former prime minister's forecast that demonetization would slow down economic growth was correct.

Singh, in his intervention at the meeting, talked about the decline in the economic growth as depicted in the last quarter GDP numbers.

He said the slowdown was primarily due to demonetisation.

and expressed serious concern over the situation, particularly the impact of the growth slowdown on job creation.

The former Prime Minister, an acclaimed economist himself, said the Gross Value Addition (GVA) is the true sub-measure of economic activity and it has experienced a steep and sustained fall.

"Private sector investment has collapsed and the economy is running on just one engine of public spending," he said at the meeting.

Singh said the GVA growth of the industry has fallen from 10.7 per cent in March 2016 to just 3.8 per cent in March 2017, a decline of nearly seven percentage points of growth.

"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.

Gandhi in her speech said, "The government's experiments and policies are characterized by poor planning and shoddy implementation. They have been disastrous for our social and economic fabric." 

She said demonetisation was touted as a great success, but till today the government refuses to disclose how much of the demonetised currency in circulation was actually returned to banks.

"It isn't that the Reserve Bank of India has forgotten how to count money; it is that the actual numbers show that the scheme was a disaster," she said.

Gandhi also attacked the 'Make in India' campaign saying it failed to create jobs or attract investment and unemployment was rampant in the country.

The former Prime Minister noted that the construction industry, which is one of the largest employment generators in the country, has suffered contraction.

This, he said, "implies loss of millions of jobs for the nation's workforce".

At the party briefing after the CWC meet, senior spokesperson Ghulam Nabi Azad said the Congress had raised the issue of demonetisation both outside and inside Parliament.

Azad said Manmohan Singh and former Finance Minister P Chidambaram had said that note ban will have a bad effect on the economy and will affect GDP.

"But the government rejected all our claims and it has to now admit within a year that the GDP has suffered a loss and how much loss the country has to suffer in last three years," said the Leader of Opposition in Rajya Sabha.