Demonetization: IMF Cuts India’s Growth, Congress to Besiege RBI Offices

Congress to Besiege RBI Offices
Congress to Besiege RBI Offices

Most analysts are increasingly criticizing the role of the Reserve Bank of India (RBI) in imposing demonetization on the people in the country.

By Rakesh Raman

The chattering classes in India and abroad believe that India will not be able to easily recover from the damage that demonetization has done to the entire country.

The International Monetary Fund (IMF) on Monday lowered its forecasts for India in the current fiscal year by 1 percentage point.

According to IMF, it is done mainly because of the “temporary negative consumption shock” from the country’s decision to ban its two largest rupee notes about two months ago.

Prime Minister Narendra Modi had demonetized currency notes of Rs. 500 and Rs. 1000 on November 8 with the belief that his decision will help check corruption in the country.

But Modi’s decision has caused a total chaos in India. Nobel laureate and world’s top economist Professor Amartya Sen says Modi’s demonetization decision has showed the authoritarian nature of the Indian government.

Similarly, former Prime Minister of India and leading economist Dr. Manmohan Singh said in India’s Parliament that Modi’s demonetization scheme is a case of organized loot and legalized plunder.

He reminded Modi of the unfortunate deaths that have already taken place in India because Modi government is not allowing people to withdraw their own money from banks.

Last week, Dr. Manmohan Singh also said that Modi has brought India on a path of disaster and the worse is yet to come. Moreover, he said, the GDP of India after demonetization is expected to fall drastically to 6%.

[ Click here to know more about demonetization and its impact ]

Most analysts are increasingly criticizing the role of the Reserve Bank of India (RBI) in imposing demonetization on the people in the country.

Although RBI is supposed to work independently toward the best interest of the Indian economy, it is observed that the RBI – particularly the RBI governor who was recently handpicked by the Modi government – allowed the government to attack its autonomy.

Last week, RBI employees wrote a letter to governor Urjit Patel, protesting against “operational mismanagement.” They said the autonomy and image of RBI has been “dented beyond repair” after the demonetization decision of November 8.

As the people of India are suffering, major opposition parties have been protesting aggressively against the note ban decision of the government.

Now, the Congress Party has decided to besiege 33 RBI offices across the country on Wednesday – January 18 – as the party believes that the Modi government in connivance with the RBI governor have destroyed the autonomy of the RBI.

By Rakesh Raman, who is a government award-winning journalist and social scientist. You also can visit the REAL VOTER – Politics in India Information Center that he manages.

Photo courtesy: Congress

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Rakesh Raman