India’s economy graph has taken a southward turn due to adventure of demonetization undertaken about a year ago and it was not required either economically or technically, said former Prime Minister of India, Manmohan Singh, who is considered as the architect of early ’90s reforms.
Eminent economist and Nobel laureate Amartya Sen mentioned lately the demonetization decision of Prime Minister Narendra Modi undermines trust of entire economy.
Originally aimed, as claimed by the PM, the demonetization was needed to weed out black money from the country, but the bold decision unfortunately backfired and largely cash-based economy of the country was disrupted. Added to it, people with undocumented money opened multiple bank accounts to convert their cash illegally. The objective was not served though the government is investigating on such illegal transactions. The process will take years before such individuals are booked.
The slowing down of economy that started just before demonetization exacerbated after the note ban. Announcement of new projects declined and in the words of Centre for Monitoring Indian Economy (CMIE) the capex cycle of India was heavily hit.
According to Anarock Property Consultant, a decline of 60 percent in the quarter ended September 30 was seen in project launches across top seven cities of the country compared to the last three months of last year when the 1,000 and 500 denominations of currency were banned overnight.
The chairman and managing director of property consultant Knight Frank India, Shishir Baijal, said such regulations have made the property market sluggish further and about another 18 months will be the observation period in the sector.
Critics point out the Modi government has failed to create new jobs too. In current scenario about 10 million jobs are required every year but in last fiscal year only 230,000 jobs were added.