RBI governor Urjit PAtel to brief the parliamentary panel on Jan 19, Narendra Modi expected to meet the economists on December 27.
Three out of four economists summoned by the Standing Committee of Finance headed by Congress MP Veerappa Moily, expressed deep anxiety and concern towards the demonetization being pursued by the Bhartiya Janata Party. Noted economists Kavita Rao, Professor at National Institute of Public Finance and Policy, Pronab Sen, former Chief Statistician to the government of India and Mahesh Vyas, CEO, Centre for Monitoring Indian economy were critical of the demonetization process whereas Rajiv Kumar, senior fellow, Centre for Policy Research argued for it in front of the committee. “This committee will submit its report on demonetization on the first day of the Budget Session of the Parliament,” said a member of the committee on the condition of anonymity.
Sources confirmed to WION-DNA that the experts questioned how the conversion of cash economy into digital would take place within the confined time declared by the central government. All three economists who expressed concern on demonetization spoke on the issue of counterfeit currency, inflation and black money. The above mentioned economists argued in the committee that a lot of unaccounted black money does not exist in cash and is parked in other sectors of the economy. Sources also confirmed that three economists said that currency reform might end up spiking the inflation instead of reducing it. Lastly, it was also argued that for a meaningful war against black money, the government should denotify a part of the currency every two years.
The Committee has decided to call Urjit Patel, Governor, Reserve Bank of India and members of the Indian Banking Association on January 19, 2017. The meeting was also attended by former Prime Minister Manmohan Singh.
Even the Prime Minister Narendra Modi is expected to meet the economists on December 27 to discuss the state of the economy. The economists in the first half of the day will meet the Finance Minister Arun Jaitley and spend the second half with the PM. Since the exercise has become politically contested, every opinion of experts in this field counts both for the government and the Opposition.
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