Demonetisation was a fundamental corrective without which the Indian economy would have collapsed by now just like subprime crisis in the US, said right-wing ideologue Swaminathan Gurumurthy.
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 fuelled 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 is also the co-convenor of RSS affiliate Swadeshi Jagran Manch. Earlier in November 2017, a year after Narendra Modi government came out with demonetisation, Gurumurthy had written many articles terming demonetisation as a much needed step for India’s economy much like liberalisation of the 1990s. Gurumurthy has also delivered many public lectures on the merits of demonetisation.
Meanwhile, as India completes two years of demonetisation today, Finance Minister Arun Jaitley once again come out in support of the exercise explaining how the noteban by the government helped in formalising the economy. Arun Jaitley said that demonetisation helped in tackling black money and expanding the tax base. “Demonetisation is a key step in a chain of important decisions taken by the Government to formalise the economy,” Arun Jaitley wrote in a blog.