Demonetisation was an attack on RBI’s credibility: Dr Manmohan Singh

Dr Singh however praised Modi’s decision to encourage digital economy.

Prime Minister Narendra Modi must accept that demonetisation was a blunder. He should take steps to rebuild the economy after this blunder, former prime minister Dr. Manmohan Singh said in an interview to BloombergQuint.

"The impact of demonetisation on the society's weaker sections and business was far more damaging than what economic indicators reveal".

Demonetisation was an attack on the independence and credibility of the RBI as an institution. Modi must accept his mistake and work towards rebuilding the economy, Dr Singh further said.

"It is time the prime minister graciously acknowledges the blunder and seeks support from all to rebuild our economy. Demonetisation has also caused reputational damage to India as a peaceful and stable nation for economic policy," he further said.

Dr Singh however praised Modi's decision to encourage digital economy. "If formalisation of the informal sector means widening of the tax base, it should be welcomed. But the means is as important as the ends. GST is certainly an idea in that direction to widen the tax base but the implementation of it is threatening to derail the informal sector entirely," the former PM also said.

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