New Delhi: In his first remarks on the scrapping of old Rs 500 and Rs 1,000 banknotes, President Pranab Mukherjee warned on Thursday that the government’s demonetisation drive might lead to a temporary slowdown of the economy. The President said that extra care must be taken to alleviate sufferings of the poor triggered by economic slowdown which has become unavoidable after demonetisation.
“Demonetisation, while immobilising black money and fighting corruption, may lead to a temporary slowdown of the economy. We all will have to be extra careful to alleviate suffering of the poor which might become unavoidable for the expected progress in the long term,” said the President. He was addressing the governors and lieutenants governors through video-conferencing from Rashtrapati Bhavan.
Prime Minister Narendra Modi’s move on November 8 to scrap 86 per cent of the cash in circulation to fight black money and fake currency immediately led to a crippling cash crunch, hitting India’s largely cash-based economy and clouding growth forecasts.
Mr Mukherjee said that while he appreciated the thrust on transition from entitlement approach to an entrepreneurial one for poverty alleviation, “I am not too sure that the poor can wait that long.”
“They need to get succour here and now, so that they can also participate actively in the national march towards a future devoid of hunger, unemployment and exploitation. The recent package announced by the PM will provide some relief,” he said.
He asked the governors and lieutenant-governors to play an important role in easing tensions in society. “Goodwill must prevail between different communities. Harmony may be put to test by vested interests,” the President said.
