Demonetisation did not slowdown economy, Raghuram Rajan's policies did: Niti Aayog VC
New Delhi, Sep 3: Rubbishing Congress' claims that the demonetisation slowed down the economy, Niti Aayog's Vice-Chairman Rajiv Kumar on Monday said that there is not a shred of evidence to prove that the note ban resulted in slowdown. He said slowdown post-demonetisation was a continuation of a declining trend which began after the last quarter of 2015-16.
Kumar lashed out at former finance minister P Chidambaram and former prime minister Manmohan Singh for backing the notion that demonetisation slowed down the economy.
"This is a comletely false narrative. I am afraid that leading people like Mr. Chidambaram and our former PM added to this. If you look at the growth rate statistics then you will find that in the posst demonetisation period the growth rate came down not becasue of the demonetisation but becasue there was a declining trend for the last six quarters starting from the last quarter of 2015-16 when the growth rate was as high as 9.2%," Kumar told news agency ANI.
"Every sucessive quarter, the growth has been coming down. So this was continuation of a trend and because of the shock given by the demonetisation as has been claimed. There is no evidence to show that there has been a direct link between the demonetisation and the slowdown in the growth rate," he added.
Chidambaram has been criticising the BJP-led Centre's demonetisation move. Last week, Chidambaram said Indian economy lost 1.5% of GDP in terms of growth because of note ban. Dr Manmohan Singh had last year said the economy was on a downhill path, thanks to an 'adventure called demonetisation'. "I don't think demonetization was at all required... I don't think it was technically, economically necessary to launch this adventure," he had said in September 2017.
The Niti Aayog Vice Chairman further reportedly said, "Growth was declining due to former RBI Governor Raghuram Rajan's policies".
Rajan had earlier said that he had made it quite clear to the government that the demonetisation was "not a good idea" and that its implementation was "not well-planned" since 87.5 per cent of the currency was being demonetised. He had said demonetisation "was not a well-planned, well thought-out, useful exercise and I told the government that when the idea was first mooted."
On November 8, 2016, the Centre had banned Rs 500 and Rs 1,000 currency notes to curtail the shadow economy and crack down on the use of illicit and counterfeit cash to fund illegal activities and terrorism.
The Indian Economy posted a robust growth of 8.2 % in the first quarter of fiscal 2018-19. This is the highest GDP growth since the second quarter (Q2) of the financial year 2014-15 when the GDP grew at 8.4 per cent.