As Narendra Modi Government’s cornerstone decision of demonetization completed two years on Thursday, strong reactions came from various corners. The opposition on one side attacked the Government by calling the move of demonetization a failure, the Government on other side defended itself by presenting several facts and figures.
Amid this, well known Journalist and economist, Swaminathan Gurumurthy came up with his take on the demonetization. Gurumurthy serves as a part time director for the RBI and is also a co-convenor of RSS affiliated Swadeshi Jagran Manch. In a series of tweets, Gurumurthy explained the benefits of demonetization.
“demonetisation was a fundamental corrective without which the Indian economy would have collapsed by now just like subprime crisis in the US,” said the right-wing ideologue. Throwing light on the state of economy between 2004-2010, Gurumurthy, who is currently serving as a part-time director of RBI, tweeted: “……The growth driven by asst price rise led consumption fueled by withdrawal of capital gains tax was a mirage. Continuation of it would have been disastrous. DM was an inevitable purgative.”
“While stocks climbed 32%, gold 38%, land 21%, GDP 5.4%, inflation 4.5% and jobs 60 million, CAD over $20 billion in 1999-2004, the stocks rose 338%, gold 332%, and land 300 to 2100%, GDP 9.8%, prices 6.8%, jobs just 1.7 million, CAD $360 billion between 2004-2014,” he tweeted.
“So, noteban helped in arresting the “asset price driven fake growth,” he noted. “But for demonetisation asset price driven fake growth wouldn’t have stopped, India would have collapsed by 500-1000 explosion to over Rs 30 lac Cr by now like subprime credit in US, tax base wouldn’t have expanded, GST would have been impossible,” he tweeted.
Gurumurthy has been a staunch supporter of the demonetization from the very beginning, which he believes was as essential as the liberalisation of the economy. Meanwhile finance minister, Arun Jaitley once again came out in support of the step that was taken under his tenure.
Arun Jaitley said that demonetisation helped in tackling black money and expanding the tax base. “Demonitisation is a key step in a chain of important decisions taken by the Government to formalise the economy,” Arun Jaitley wrote in a blog.