Moneycontrol
Aug 10, 2017 09:01 PM IST | Source: Moneycontrol.com

Ex- RBI Guv Bimal Jalan says he would have not allowed demonetisation

Jalan has previously stated that a rupee authorized and circulated by RBI and the government should not be demonetized in any situation short of a crisis.

Ex- RBI Guv Bimal Jalan says he would have not allowed demonetisation

Even as the economy recovers from the shock of the demonetization decision taken last year, former RBI governor Bimal Jalan has said that the move would not have been approved under his watch, The Economic Times reported.

A day before, in an interview to IANS, Jalan had stated that a rupee authorized and circulated by RBI and the government should not be demonetized in any situation short of a crisis. He added that during the time the currency was demonetised, "there was no crisis".

The former RBI governor, however, told the newspaper that even as demonetisation had a negative effect, there were positives too: increase in people’s savings, deposits, investments and filing of returns.

The former Reserve Bank of India head also underlined the need to go to the root of the black money problem that has plagued India. He felt it was required to investigate if taxes were high or such factors that may have led to tax evasion.

Jalan added that the effect of demonetization on economic growth was a one-time occurrence and would not affect long-term growth. The country’s GDP fell to 6.1 percent in the fourth quarter of 2016-17 as against 7 percent in the third quarter.

Stating the need was to focus on the fundamentals of economy, he posited that growth was futile unless benefits percolated down to the last strata of the society i.e. to the poorer section.
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