New Delhi, Nov 14: As never-ending queues and chaos in front of banks and ATMs cause resentment among people, in the wake of the scrapping of Rs 500 and Rs 1,000 currency notes, economist Prabhat Patnaik predicts that India is staring at a serious recession.
On November 12, Patnaik spoke on--Demonetization: What impact will it have?--at Jawaharlal Nehru University (JNU) in Delhi, where he slammed the government for taking away purchasing power from the hands of the masses, by demonetisation of high value currency notes.
Patnaik, who is also a political commentator, adds that if purchasing power of the people is taken away from them it precipitates recession in the economy.
Patnaik states that if cash flow dries up it leads to closure of businesses and creates condition for serious recession, as 12 percent of money supply in the country has been impounded by the government.
Patnaik has taught at the Centre for Economic Studies and Planning in the School of Social Sciences at JNU, from 1974 until his retirement in 2010.
He was the vice-chairman of the Planning Board of Kerala from June 2006 to May 2011.
Here is the full video of Patnaik's speech: