Demonetisation, hasty GST implementation adversely affected GDP: Manmohan Singh

PM Narendra Modi with Finance Minister Arun Jaitley

PM Narendra Modi with Finance Minister Arun Jaitley

Former Prime Minister Manmohan Singh has taken a dig at PM Narendra Modi and BJP-led government at the Centre saying the demonetisation move and decision to implement GST hastily have adversely affected the country's GDP growth.

"Both demonetisation and the GST have had some impact (on GDP growth)", he told CNBC-TV 18.

Singh added that "because the GST has been put into practice in haste, there are many glitches now coming up".

Although the ruling government has been singing praises for Prime Minister Narendra Modi's decision of October previous year to declare the Rs 500 and Rs 1000 currency notes as no longer legal tender - a sudden announcement that flushed out 86 per cent of India's currency from the market - the slump in the GDP had forced even Union finance minister Arun Jaitley to admit that the new tax regime had impacted the country's manufacturing sector. "These are bound to affect the GDP growth adversely", he said.

On November 25 a year ago, some two weeks after old 500 and 1,000 rupee notes were junked, Singh had in his Parliament speech termed demonetisation a "monumental mismanagement", "organised loot" and "legalised plunder" which would cause GDP growth to fall by 2 per cent.

The government had blamed de-stocking ahead of the rollout of the Goods and Services Tax (GST) from July 1 as the primary reason for the fall in the GDP growth rate.

In April, when the supporting GST bill was passed in Parliament, the former prime minister had hailed it as a "game-changer" while cautioning against the difficulties in its implementation.

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