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Demonetisation Decision Is So Huge That Our Best Economists Remain Confused In Their Calculations: PM Narendra Modi

The PM says the move isn't politically motivated.

29/12/2016 10:20 PM IST | Updated 29/12/2016 11:44 PM IST
Adnan Abidi / Reuters

Prime Minister Narendra Modi has strongly defended the government's decision to scrap Rs 1,000 and Rs 500 notes, saying the move isn't "politically motivated" and is aimed at "long-term structural reform" of the country's economy.

In an interview with India Today magazine, excerpts of which were telecast in text form on India Today TV, Modi said he would not have taken the decision to scrap old Rs 500 and Rs 1,000 notes if he was guided by short-term electoral politics.

"We took the demonetisation decision not for some short-term windfall gain, but for a long term structural transformation," Modi was quoted as saying by India Today.

"This decision (demonetisation) is so huge that even our best economists remain confused in their calculations. India's 1.25 billion citizens, however, have welcomed it wholeheartedly and supported it even in the face of great personal difficulties, intuitively understanding its impact and importance," he told the magazine.

On the number of modifications that have been made since the announcement, he reassured that there was no uncertainty on the policy, but only the strategy was being modified.

"One must be able to distinguish between 'neeti' (policy) and 'rann neeti' (strategy) and not put them in the same basket. The decision of demonetisation, which reflects our 'neeti', is unequivocally clear, unwavering and categorical," the Prime Minister said.

"Our 'rann neeti', however, needed to be different, aptly summarised by the age-old saying of 'tu daal daal, main paat paat'. We must stay two steps ahead of the enemy. When problems are identified, we respond promptly and take necessary steps," he added.

He also took a jibe at this opponents and said their criticism may be politically motivated, and specifically addressed the strong criticism from former Prime Minister Manmohan Singh who has called the policy a "monumental management failure" and "a case of organised loot and legalised plunder".

"Regarding Manmohan Singh ji, it is interesting that the words 'monumental mismanagement' came from a leader who has been at the helm of India's economic journey for around 45 years," Modi said.

In the interview, aired on the eve of expiry of the December 30 deadline to deposit demonetised currency in banks, the Prime Minister urged citizens not to regard digital transactions as a short-term substitute for cash payments.

"Digital payment is a way of cleaning the economy in the long run," the Prime Minister said, adding the
revenue collected from the move "will be used for the welfare of the poor, downtrodden and the marginalised."

With just a day left for the 50-day deadline for demonetisation's benefits to show, Modi has claimed that the move has forced black money, whether belonging to corrupt politicians or bureaucrats, out in the open.

"Counterfeit notes, which our intelligence agencies have reported to be available in big volumes with our enemies, have been instantly neutralised.

With agency inputs from IANS and Reuters.

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