AMN /New Delhi
Congress party has said that the present economic situation in the country showed that demonitisation has adversely affected every section of society. It reminded former Prime Minister Manmohan Singh’s warning that demonetisation of old currency notes of Rs 500 and Rs 1,000 would have an adverse impact on economic growth in the country.
In an editorial in its latest issue, the Congress Sandesh said, ‘when the PM made an announcement on demonetisation on November 8 last year, he had said that it was a revolutionary step. He had said this would bring back the black money, inflation would reduce, the GDP would enhance and the infiltration of terrorists would reduce. ‘He also said that the counterfeit currency would go out of circulation and that tax collection would substantially increase. ‘Former Prime Minister Manmohan Singh, a renowned economist the world over, had warned that this would have an impact on growth and economy and the GDP would come down by almost 2 per cent.
The government trashed his claims. ‘But now, the effects are visible. The GDP has come down, the job market has crashed . The industrial production has shrunk. Both educated and the uneducated are only witnessing a dismay in life with no visible opportunity. Every section of the society has been adversely effected.’ The Congress Sandesh said that many of the after affects of demonetisation were being felt only now. ‘Many of the after effects of demonetisation are being felt only now and the banking system is forced to admit that the pressure on the economy due to the ill time move is going to be felt in a long time to come. The near destruction of the unorganised sector is now visible to all. The demands in farmer agitations that have hit many states is the restoration of cash payments at the mandi, since it is hitting the ryots’ interests in a big way.
‘The unthought of haste and pressure in moving towards a cashless economy while the country is neither aware of the nuances of the digital economy, nor is the spread of internet real across the country” was now showing. ‘The Prime Minister is probably not aware that in many village hamlets which have one bank branch in 10 to 15 hamlets, may be ten to 15 km from each other and to make frequent trips of 30 km is neither feasible nor desirable,’ it said.
The Congress Sandesh said the alarming state of the Indian economy and its continuous downwards trajectory was a cause of serious concern. ‘The alarming state of the Indian economy and the continuous downwards trajectory is a cause of serious concern for the people of the country,’it said. It said despite the poor state of the economy, the NDA government was not willing to admit its faultlines. ‘The government is not willing to admit its faultlines and is busy trying to justify by claiming in the media that the economy is growing at a good measure,’it said.
‘The clever and manipulative government of the BJP decided to change the base year for the calculation of the index of industrial production and wholesale price index from 2002 to 2011 so that the GDP growth can be shown on an increase. ‘In the last year, the quarterly GDP and the GVA (Gross Value added ) have been steadily falling. GDP, as per the government figures, has come down to 6.1 per cent despite the changed base year. ‘We understand that demonetisation is not the sole cause for this decline but instead it is becaise of the myriad reasons of the neglect of the economy by the government. Dr Singh said the GVA growth of industry fell down from 10.7 per cent in March 2016 to just 3.8 per cent in March 2017, a decline of nearly seven percentage points of growth,’ it said. The Congress mouthpiece said that given the state of the economy, the government had failed to attract any investment in the manufacturing sector and that the FDI is coming mainly in the retail and services sector. ‘The much travelled PM, during his recent visit to Germany, claimed that the Indian economy is growing at a rate of 7 per cent. But, it has not attracted any investment in the manufacturing sector. The FDI in India is coming mostly in the retail and the services sector. ‘Despite all the false claims, India is at rank 130 in the Ease of Business index..
The ‘Make In India’ programme continues to be another. Whereas there are some promises of large growups to invest in India, they are mostly or the assembly of their products rather than manufacturing. ‘Most assembly lines run on robots these days and even if they actually do, at some time, come to India, it is not going to add to employment opportunities,’it said. The Congress Sandesh said that the worst hit sector of the economy were the construction and the real estate sectors. ‘The worst hit is the construction and real estate sector. Stagnant growth in these sectors lead to stagnation in 16 to 17 affiliated industries , their distribution and consumers. Construction activity is down by 3.7 per cent in the fourth quarter. Financial sector in real estate and professional services is down by 3.3 per cent. The growth in eight core sectors is only 2.5 per cent,’ it said.