Millennium Post

Note ban will have adverse effect on GDP: Manmohan

Note ban will have adverse effect on GDP: Manmohan
Demonetisation will have a “very significant adverse effect” on the country’s GDP and will be an issue in the upcoming assembly elections in five states, former Prime Minister Manmohan Singh said on Monday.

“You will see there will be a very significant adverse effect on the country’s GDP,” Singh said, after releasing the the Congress manifesto for polls in the northern Indian state of Punjab.

Recalling his statement in Parliament that demonetisation will have a very adverse impact on the GDP of the country, Singh said subsequent developments have proved him right.

In this context, he referred to the recent projection by the National Income Unit of the Central Statistical Organisation that the GDP in 2016-17 will slow down to 7.1 per cent from 7.6 per cent a year earlier.

This, he said, had not accounted for demonetisation, which was announced by Prime Minister Narendra Modi in an unusual address to the nation on the night of November 8. Asked whether elections would be fought on the issue of demonetisation, he said, “It will be an issue in the assembly elections in five states.”

Manmohan Singh has been highly critical of demonetisation decision and has predicted a 2 per cent drop in the country’s GDP due to it.

Speaking in Rajya Sabha during a debate on the issue, Singh had castigated the government and the Prime Minister over the note ban, saying its implementation was a “monumental management failure” and a case of “organised loot and legalised plunder.”

Singh, who spoke in the presence of Prime Minister Narendra Modi in Rajya Sabha, said the decision will result in decline of GDP by 2 per cent, it being an “under-estimate”.

“These measures convinced me that the way the scheme has been implemented, it’s a monumental management failure. And in fact, it is a case of organised loot and legalised plunder,” he had said.

Higher tax mop up reflects no slowdown post note ban: Jaitley

Dismissing slowdown concerns post demonetisation as “anecdotal”, Finance Minister Arun Jaitley on Monday said indirect tax collection grew at a decent 14.2 per cent in December buoyed mainly by excise, reflecting an uptick in manufacturing.

December, which witnessed currency crunch following the ban on high value notes, saw excise collections grow at 31.6 per cent, while service tax was up by 12.4 per cent. Customs mop up, however, witnessed 6.3 per cent decline mainly on account of dip in gold imports.

For the April-December period of the current fiscal, indirect tax receipts soared 25 per cent to INR 6.30 lakh crore, which is about 81 per cent of Budget Estimates. Direct tax collection was also up 12.01 per cent at INR 5.53 lakh crore, 65 per cent of BE.

After the shock demonetisation of INR 500 and INR 1,000 notes on November 8, critics have voiced concerns of slowdown in industrial activity. Mop up from excise duty -- a reflection on manufacturing activity -- registered a hefty 43 per cent growth in the nine month period to December.

Asked about reports of job losses post demonetisation, Jaitley said: “All these stories and reports are anecdotal.The growth figure does not depend on anecdotal basis...Statistics and taxation figures are real. This is the money which has come in.”

Excise collection in December grew 31.6 per cent to about INR 36,000 crore. Service Tax realisation grew 12.4 per cent to INR 23,000 crore. Collection of indirect taxes, which comprise excise, service tax and customs, was up 14.2 per cent to about INR 76,000 crore last month.

Jaitley said the data showed that during the 9-month period while direct tax collection has moved up, indirect tax collection moved up significantly.

Tax collection in December 2016 has also moved up compared to December 2015 and November 2015.

When compared with tax collections in November, indirect tax receipts last month were up 12.8 per cent, he said.

“Since there has been a considerable debate in the public space as to the impact of currency squeeze in the months of November and December, the data of these two months becomes relevant,” Jaitley said. 

TMC MPs on sit-in in Delhi over note ban

Continuing with the protest, TMC MPs on Monday staged a demonstration here raising slogans against the Modi government’s demonetisation drive and arrest of party legislators in the alleged Rose Valley scam. “We condemn conspiracy in the name of investigation and we condemn atrocities in the name of ‘notebandi’,” TMC leader Derek O’Brien told PTI as 34 Trinamool Congress MPs began the ‘dharna’ at South Avenue. 

The sit-in in the national capital, which will continue till 6 PM, is part of TMC’s nation-wide protest against the Modi government. Similar protest is being held on Monday and will continue for three days in Bengal, Bhubaneswar, Punjab, Kishanganj, Manipur, Tripura, Assam, Jharkhand against the note ban and the suffering that is being caused to the people, according to a TMC statement. TMC has intensified its protest against the Modi government’s demonetisation drive after the arrest of party MPs Tapas Paul and Sudeep Bandopadhaya in the alleged Rose Valley chit fund scam.


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