Former RBI Governor, D Subbarao. Source: Reuters

Former Reserve Bank of India (RBI) chief, Duvvuri Subbarao discussed PM Narendra Modi-ordered demonetisation drive and expressed his discomfort with it. When asked about how will he measure the success of demonetisation, Subbarao said, “I will use two metrics to measure the success of demonetisation. The first metrics is to what extent has the stock of black money been destroyed and the second is to what extent has the further regeneration of black money been prevented.”

He further stated, in an exclusive interview with CNBC TV-18’s Lata Venkatesh, that “in the first one, the initial expectation of the government was 15-20 percent of the black money (which is about 2- 3 trillion rupees) to be destroyed which would have a deadly blow to all the people who had that money and would have been a huge win for the RBI and the government could have declared moral and material victory. But nothing of that sort has happened as 97 per cent of the money has come back and now the government is looking for the recovery of black money out of the deposits.”

EXCL D Subbarao, Former Governor, @RBI: There has been inadequate communication post note ban. pic.twitter.com/R9axKrOCgL — CNBC-TV18 News (@CNBCTV18News) January 23, 2017

In D Subbarao’s view, “If 1 percent is not added to the tax-to-GDP ratio, then demonetisation would be like the search for the weapon of mass destruction in Iraq.”

When asked about his discomfort with demonetisation, Subbarao said, that the government and the Reserve Bank of India (RBI) confused the people as there was inadequate communication post the note ban and that there could have been greater preparedness by teh government.