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Demonetisation & GST Held Back India’s Economic Growth Last Year, Says Former RBI Governor Raghuram Rajan

JAVED SAIFI | 0
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| November 12 , 2018 , 12:27 IST

After two years of Demonetisation that was implemented by the Prime Minister Narendra Modi-led government, Former Reserve Bank of India Governor Raghuram Rajan has criticized the move by saying that Demonetisation and Goods and Services Tax (GST) are the two major headwinds that held back India’s economic growth last year, media reported on Sunday.

Rajan was quoted by PTI as saying, “The two successive shocks of demonetisation and GST had a serious impact on growth in India. Growth has fallen off interestingly at a time when growth in the global economy has been peaking.” 

Rajan also said that the current economic growth rate of 7 percent is not enough to satisfy economy requirements in India.  

“The reality is that seven is not enough for the kind of people coming into the labour market and we need jobs for them, so we need more and cannot be satisfied at this level,” Rajan said.

Also Read: Rupee Will Not Go Into Free Fall, Says Former RBI Governor Raghuram Rajan 

Rajan delivered the above remarks about demonetisation and GST while addressing an audience at the University of California in Berkeley on Friday.

On the second anniversary of demonetisation on November 8, finance minister Arun Jaitley in a Facebook blog post said, "Demonetisation is a key step in a chain of important decisions taken by the Government to formalise the economy."

"The Government first targeted the black money outside India. Asset holders were asked to bring this money back on payment of penal tax. Those who failed to do so are being prosecuted under the Black Money Act. Details of all accounts and assets abroad which have reached the government resulted in action against the violators," the post reads.