As early as November 2016, a few days after a massive demonetisation drive was launched by Prime Minister Narendra Modi, former PM and highly-respected economist Manmohan Singh called the move "organised loot and legalised plunder" during a speech in Parliament, to much desk-banging, rousing cheers and applause.
True to his mild manner, attacked repeatedly by the Opposition as ineffective during his term as PM, Singh said he hoped that Modi, "even at this late hour, will find a solution".
He finished with some flourish.
"For those saying this is good in the long run, it reminds me of John Keynes' words, 'In the long run we are all dead.'"
What Singh also pointed out — which is proving prophetic now — was that the GDP (gross domestic product) of the country "can decline by two percentage point, this is an under estimate not an over estimate. It is no good that everyday the banking system comes up with new rules, it reflects very poorly on the PMO and the RBI."
"It is important to take note of the grievances of the ordinary people who have suffered. I say so with all responsibility, we do not know what will be the final outcome. The prime minister says we should wait for 50 days. Fifty days is not a long time. But for the poor even a short period of 50 days can be disastrous. Till now 60 to 65 people have lost their lives," Singh had said.
Watch Manmohan Singh's full speech at the Parliament below.
On Thursday, the figures for India's GDP for the first quarter of the current fiscal that ended in June were out. It showed that India's economic growth has slid to a three-year low, owing in parts to Modi's decision to scrap high-value old banknotes to flush out black money. India's GDP growth has sharply dipped to 5.7% in Q1 Of 2017-18.
The growth has dipped from 7.9% in the April-June quarter in 2016 to 5.7% for the corresponding period this year, proving Singh's warning about the 2% dip absolutely spot on.
Twitter exploded with throwback to Singh's warning.
Dr Manmohan Singh called #DemonetisationDisaster "organised loot and plunder" & said it would hit GDP by 2 percent. He was spot on.— Swati Chaturvedi (@bainjal) August 31, 2017
So much maligned Dr Manmohan Singh was not quite wrong. 2 per cent plus negative impact on GDP growth post DeMo! #DeMo— Rajdeep Sardesai (@sardesairajdeep) August 31, 2017
So Manmohan Singh was not Absolutely wrong when he said that GDP likely to go down 2% after demonetization.Its down exactly 2% Now— Narendra nath mishra (@iamnarendranath) August 31, 2017
Turns out Dr Manmohan Singh was right about demonetisation. India's GDP shrunk by a staggering 2.2%. After all, he was PM, FM & RBI Governor pic.twitter.com/GgMPivjUYq— Milind Deora (@milinddeora) August 31, 2017
GDP and GVA figures are more evidence of Dr Manmohan Singh's indictment of 'monumental mismanagement'.— P. Chidambaram (@PChidambaram_IN) August 31, 2017
Exactly. When Dr Manmohan Singh said that demonetisation would cost us 2% in GDP growth he had no clue what he was talking about! https://t.co/TBDiiepsMa— Omar Abdullah (@OmarAbdullah) August 31, 2017
In the days following Singh's speech, Modi had mocked the former RBI Governor at a rally.
"Kya kya bole. Parliament me bola, gaon, galliyon me jaakar chillaya, Bharat barbaad ho jayega. GDP 2% kam ho jayega, koi kehta kisan barbaad, fasal barbaad, berozgaari aajayegi. Daily ek jhoot." — Narendra Modi
It translated to: "They've spoken in Parliament (referring to Singh's speech), they've shouted in the villages and streets that India will be destroyed, GDP will dip by 2%, they have said farmers and crops will be destroyed and unemployment will rise. Daily one lie."
Even on Wednesday, Finance Minister Arun Jaitley said, "Some people had expected a very large shock to economic growth on account of demonetisation. Their expectations have been belied."
There was fair warning from economists. Nobel laureate Amartya Sen told India Today's Karan Thapar that the move was a "gigantic mistake, both in terms of its objective of dealing with corruption as well as the objective of one rapid jump of getting into a cashless economy".
There was a huge human cost to the move as well. Apart from the transaction cost of demonetisation, there were huge number of man-hours spent in exchanging the old notes for new, during which reportedly as many as 100 people died standing in long queues and in other related causes.
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