Note ban organised loot, says Manmohan

Ahmedabad: Former prime minister Manmohan Singh on Tuesday described the BJP-led government's demonetisation exercise as a reckless step, said scrapping higher value currency notes was organised loot and legalised plunder.

None its objectives were achieved, Singh said during an interactive session on the current state of the economy with businesspersons and traders.

"Demonetisation was organised loot and legalised plunder," he said during his visit to poll-bound Gujarat.

He also criticised the Centre's ambitious Ahmedabad- Mumbai bullet train project and dubbed it an exercise in vanity.

Singh's visit comes a day before Congress vice-president Rahul Gandhi is likely to tour Surat on the anniversary of the government's announcement of the demonetisation exercise.

The former prime minister also alleged that demonetisation and rollout of the Goods and Services Tax (GST) had sown a "deep-rooted fear of tax terrorism" among the business community.

Addressing a Congress event for small and medium business owners as part of Gujarat assembly election campaign, he said that the growth in private investment is at a 25-year low which is "terrible for India's economy".

The veteran Congress leader also claimed that the recent agitations by youths from different sections of society indicated the "deep dissatisfaction" with the performance of the successive BJP governments in Gujarat.

"Since July, 60,000 looms in Surat alone has been discarded. At a rate of 35 jobs lost for every 100 looms shut, an estimate of 21,000 jobs have been lost in just one industry sector in Surat.

"The impact on the rest of the country is equally bad if not worse," Singh said at the function organised ahead of the assembly polls next month.

He said both demonetisation and GST have "sown a deep-rooted fear of tax terrorism" among the business community.

New Delhi: Finance Minister Arun Jaitley said on Tuesday that the impact of structural reforms is "behind us" and the early economic indicators point to an improvement.

Structural reforms like demonetisation and the rollout of the Goods and Services Tax would have had some consequences, but they will help the economy, in the long run, he said.

"Having undertaken two major structural changes which are extremely important for the Indian economy, I think the impact being substantially behind us, the early indications for the future look to be positive," he said at a conclave.

Jaitley also contested Congress leader Manmohan Singh for calling demonetisation an "organised loot", insisting the exercise was an "ethical drive and a moral step" that made corruption difficult.

The loot is what happened in the 2G scam, Commonwealth games and allocation of coal blocks, whereas demonetisation was an economic exercise based on ethical and moral rationales, Jaitley told reporters here.

"An anti-black money drive is (an) ethical drive, a moral step. And what is morally and ethically correct has to be politically correct," the minister said, targeting the former prime minister.

Calling the note ban a "reckless" exercise, Manmohan Singh said during an interactive session with businessmen and traders in Ahmedabad that "demonetisation was an organised loot and legalised plunder".

Demonetisation and GST roll-out have become significant issues in the Assembly elections in Gujarat and Himachal Pradesh, with the main opposition maintaining that the two structural reform measures had adversely affected the economy.

The finance minister said while the ten years of UPA government were characterised by "policy paralysis", the Modi dispensation introduced structural reforms to make India a developed nation and give it a cleaner economy.

Jaitley said the BJP believes that status quo in economy needed to be shaken up to end corruption.

Taking on the Congress over the issue, Jaitley said the previous Congress governments never took any such big step against black money.

"The Congress' main aim is to serve the family whereas BJP wants to help the nation."

The minister said that demonetisation was aimed at making India a more formal economy with a broader tax base and less cash in the system.