After being questioned by the Oppositions, the Central Government has now been cornered by the former Reserve Bank Of India (RBI) governor, Raghuram Rajan over their demonetisation move.
Slamming the government over the move, Raghuram Rajan said that he had already warned the government about the short-term costs of demonetisation outweighing the long-term profits.
He further added that he had suggested other ways to stamp out the black money from the system.
Finally speaking his mind out in his yet to be released book — I Do What I Do: On Reforms Rhetoric and Resolve — Rajan claims that he had earlier given an oral suggestions in February 2016 and also submitted a note highlighting the required steps along with needed time if the government plans to carry on with demonetisation move.
In his book, Rajan wrote, “The RBI flagged what would happen if preparation was inadequate.”
The book which highlights the differences between the former RBI governor and the present BJP government does not a tell all, yet includes short introductions and postscripts accompanying the pieces offer fascinating insights.
After leaving the office on September 3 last year, it is the first time that Raghuram Rajan has spoken on demonetisation.
“I was asked by the government in February 2016 for my view on demonetisation, which I gave orally. Although there might be long-term benefits, I felt the likely short-term economic costs would outweigh them,” he wrote.
“I made these views known in no uncertain terms”, Rajan added.
Post demonetisation, the growth of GDP slowed sharply from 7% in October-December quarter to 6.1% in January-March and 5.7% in April-June, primarily because of the cash squeeze. ]
Earlier, the Congress party had termed demonetisation as the ‘biggest scam’ and accused Prime Minister Narendra Modi of misleading the people, saying that he had repeatedly made ‘false statements’ on the decision to junk high-value currency. The party demanded that PM Modi should accept moral responsibility and must apologise.