Huge blunder, says Manmohan Singh on currency ban

New Delhi: Former Prime Minister Manmohan Singh Thursday led the Opposition’s charge in the Rajya Sabha and in a blistering attack punched holes in the Narendra Modi government’s controversial demonetisation move, which he described as “legalised plunder” and “monumental blunder”.

Dr Singh said the execution of the demonetisation scheme was a “monumental management failure” and “a case of organised loot, legalised plunder” of ordinary citizens. Being an eminent economist with high social and political standing, Dr Singh’s scathing attack is set to haunt the BJP for some time to come. While the Rajya Sabha had to be adjourned, the Opposition, particularly the Congress, virtually outmanoeuvred the government in floor strategy on Thursday. The Congress virtually forced the Rajya Sabha to keep the day’s business aside and let Dr Singh speak as Prime Minister Narendra Modi was present in the House.

After the lunch break, the Opposition, led by Congress MPs, forced an adjournment following the Prime Minister’s absence from the House. “Bhag gaya bhai bhag gaya, Pradhan Mantri bhag gaya,” said Congress and other Opposition members as they trooped into the Well, forcing the adjournment of the Rajya Sabha. Also, with the decision to observe “Aakrosh Divas” across the country on November 28, the Opposition is in no mood to lose the momentum it has so far gained. On Thursday, several Opposition party leaders presented an united front and made it clear the Rajya Sabha “will not be allowed to function till the Prime Ministers ensured his presence throughout”. The Opposition’s united stand forced the adjournment of the House as it met to take up the day’s business.

It was clear that the government’s attempts and its back-channel talks with the Congress and Trinamul leaders had failed to break the deadlock. A seething finance minister Arun Jaitley lashed out, claiming that there was “no substance” in the Opposition parties’ arguments, and he claimed the Opposition was trying to “run away” from any discussion. Dr Singh’s attack on the government was short, crisp, to the point and scathing. There were no rhetoric. Though he agreed with the “objectives”, Dr Singh said, he pointed out that “in the process of demonetisation... monumental mismanagement has been made”. Taking the government’s argument that in the long run the country would benefit, Dr Singh quoted famous British economist John Maynard Keynes who had said that “in the long run, all of us are dead”.

Dr Singh felt, therefore, that it was “important to take note of the grievances of ordinary people who have suffered as a result of this imposition on the country overnight by the Prime Minister”. Dr Singh, a renowned economist himself, said: “I say so with all responsibility that we do not know what will be the final outcome.” Tearing apart the government’s argument that all will be well in 50 days, the former PM said: “50 days is a short period. But for those who are poor and from the deprived sections of society, even 50 days of torture can bring about disastrous effects.”

This led to thunderous applause and thumping of desks from the Opposition benches. Reminding the House that nearly “60 to 65 people have lost their lives”, Dr Singh felt the move could “erode our people’s confidence in the currency system and in the banking system”.

Speaking as an economist who has also run the country, Dr Singh painted a bleak picture that could be caused by the government’s move, and said: “My own feeling is that the national income, that is GDP, can decline by about two per cent as a result of what has been done.” He said “this is an underestimate, not an overestimate”.

Criticising the new rules being spouted out every day by the government, Dr Singh felt it is “no good that every day the banking system comes with modification of the rules, the conditions under which people can withdraw money... That reflects very poorly on the Prime Minister’s office, on the finance minister’s office and on the Reserve Bank of India. I am very sorry that the Reserve Bank of India has been exposed to this sort of criticism, which I think is fully justified.”

Speaking slowly, he asked Mr Modi to “name any country he may think of where people have deposited their money in banks, but are not allowed to withdraw their money”.

Attacking the move, Dr Singh said: “This alone, I think... is enough to condemn what has been done in the name of the greater good of the people of the country.”

The former PM felt that the way the scheme has been implemented would “hurt agricultural growth, small industry and all those people who are in the informal sector of the economy”. Giving out statistics, Dr Singh reminded that “90 per cent of our people who work in the informal sector, 55 per cent in agriculture are reeling in distress”. He claimed that the cooperative banking system serving the people in the rural areas “is non-functional, and has been prevented from handling cash”.

Ending his eight-minute speech gracefully, Dr Singh said: “It is not my intention to pick holes in what one side does or another side does. But I sincerely hope that the Prime Minister will view that this late hour (and) will help us to find practical, pragmatic ways and means to provide relief to the suffering of the people of this country.”