Note ban was a draconian shock: Ex-CEA

NEW DELHI, NOV 29 (IANS) | Publish Date: 11/29/2018 10:48:18 AM IST

Arvind Subramanian kept a studied silence on demonetisation as long as he was Chief Economic Adviser (CEA) but six months after quitting the job he has described the note ban as a massive, draconian, monetary shock that accelerated economic slide to 6.8 per cent in the seven quarters after the decision against the 8 per cent recorded prior to it.

Breaking his silence on the November 8, 2016 decision of Prime Minister Narendra Modi, he said that he does not have a strongly-backed empirical view apart from the fact that the welfare costs, especially on the informal sector, were substantial.

“Demonetisation was a massive, draconian, monetary shock: In one fell swoop, 86 per cent of the currency in circulation was withdrawn. The real GDP growth was affected by the demonetisation. Growth had been slowing even before, but after demonetisation, the slide accelerated,” he said.



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