India's former PM Singh slams Modi's currency notes ban

Former Indian Prime Minister Manmohan Singh Thursday described the scheme of demonetisation as "a monumental mismanagement" and said it will drag India's GDP by 2 percentage points.

"This scheme of demonetisation, the way it has been implemented will hurt agricultural growth in our country, will hurt small industry, will hurt all those people who are in the informal sectors of the economy," Singh said in his address in the Upper House of Indian parliament.

"And my own feeling is that the national income, i.e. the GDP of the country, can decline by about two percentage points as a result of what has been done. This is an underestimate, not an overestimate," he added.

Singh questioned Prime Minister Narendra Modi's policy of putting curbs on withdrawing money from the bank.

"I would like to know from the prime minister, the names of any countries he may think of where people have deposited their money in the banks but they are not allowed to withdraw their money," he said.

Earlier this month, in a surprise televised address, the Indian prime minister announced withdrawal of currency notes of 500 and 1,000 Indian rupees from India's financial system.

He described the move as part of his anti-corruption drive to stop counterfeit and black money.

The currency notes of 500 and 1,000 ceased to be legal tender since then and people were urged to get the notes swapped at banks and post offices until December 30. Beyond that until March 31, the depositors have to furnish identity proof.

The move has triggered panic among the people who queued outside banks and ATMs to exchange the banned currency notes and withdraw cash, besides causing huge disruptions to daily life.

India is an overwhelmingly cash-based economy and banned currency notes are estimated to be 85 percent of the cash in circulation in the country.

Media reports have attributed over 60 deaths to demonetisation across India. These include suicides, cardiac arrests and hospital casualties owing to non-availability of money.

Since the announcement, the government has faced serious criticism from opposition, especially inside the parliament. Opposition lawmakers demand statement from Modi and caused disruptions in the parliament.

On Thursday, both the Houses of parliament were adjourned for the day over the demonetisation issue.

Singh's Congress party-led government lost power to Modi's Bhartiya Janta Party two years ago. Enditem