Demonetization, ‘hasty’ rollout of GST bound to affect GDP growth adversely: Manmohan Singh
Former prime minister Manmohan Singh today again warned of demonetization and “hasty” implementation of GST adversely impacting GDP growth.
Singh, who had previously cautioned against note ban shaving off 2% of GDP, said demonetization of 86 per cent of the currency in circulation and the hasty implementation of the Goods and Services Tax (GST) have impacted informal and small scale sectors, which account of about 40 per cent of the US$ 2.5-trillion economy.
“Both demonetization and the GST have had some impact (on GDP growth),” he said. “Both would affect the informal sector, the small scale sector… the sectors today are responsible for 40 per cent of GDP.”
Ninety per cent of India’s employment is in the informal sector, he told CNBC-TV 18. “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,” he remarked.
On November 25 last year, some two weeks after old 500 and 1,000 rupee notes were junked, Singh had in his Parliament speech termed demonetization a “monumental mismanagement”, “organised loot” and “legalised plunder” which would cause GDP growth …read more