“Nowhere in the world any democracy has taken such a coercive step,” he tells a group of traders in Ahmedabad.
Former Prime Minister Manmohan Singh on Tuesday described November 8, the day demonetisation was announced by Prime Minister Narendra Modi last year, as a “black day for economy and democracy” and said the twin blows of demonetisation and implementation of the Goods and Services Tax (GST) were disastrous for the economy and “broke the back of businesses.”
Addressing traders and businessmen in poll-bound Gujarat, Dr. Singh launched a scathing attack on the NDA government and reiterated his statement in Parliament that the note ban was “organised loot and legalised plunder.”
“Demonetisation has proved to be mere bluster to reap political dividends while the real offenders have escaped. I repeat, this was organised loot and legalised plunder,” Dr. Singh said, a day before the controversial move’s first anniversary, which the Central government is celebrating as “Anti-Black Money Day.”
‘Not the remedy’
Acknowledging that the country needs to tackle the menace of black money and tax evasion, he said demonetisation was not the pill to be prescribed for the same.
“One must remember that nowhere in the world has any democracy undertaken such a coercive move, withdrawing 86% of legal tender in one single swoop.”
Dr. Singh stressed that none of the stated objectives of the currency ban had been achieved and yet the Central government, instead of drawing any lesson from its ‘monumental mistake’, went ahead and implemented GST, which has adversely hit the economy and the growth rate.
“This twin blow is a complete disaster for our economy. It has broken the back of small and medium businesses in the country,” he said, citing how the textile industry in Surat and the ceramic plants in Morbi had been affected.
Terming the GST a badly designed and hastily implemented tax system, he said the GST — as envisioned by the UPA — was supposed to simplify taxation, with a single tax capped at 18%, to make life easier for businessmen.
“The current GST is a great departure from that vision. It has transformed into a complicated mess, with multiple slabs and rates as high as 28%, along with additional cesses,” he said, stressing that the government had ignored the advice of the Opposition parties in Parliament as well as in private consultations.
Dr. Singh also charged the Modi government with “tax terrorism” in the name of fighting corruption in the country.
“Along with demonetisation, GST has sown a deep-rooted fear of tax terrorism among the business community. At a time when the economy has slowed down considerably, despite favourable global macroeconomic conditions, the fear of tax terrorism has eroded the confidence of businesses to invest.”
New low for investment
According to him, the growth in private investment is at a 25-year low, which is terrible for the country’s economy.
Talking about his government’s achievements, Dr. Singh stressed that 140 million people were lifted out of poverty, a task no other democracy has achieved. He added that had Mr. Modi considered the wisdom of two great Gujaratis, Mahatma Gandhi and Sardar Patel, he would not have asked the RBI Governor to sign on the dotted line for scrapping the currency.