Prime Minister Narendra Modi with former PM Manmohan Singh. (File photo) Prime Minister Narendra Modi with former PM Manmohan Singh. (File photo)

Former prime minister Manmohan Singh attributed the sharp slowdown in the country’s economic growth to the note ban decision taken by the Centre last November.

The step, that involved withdrawing almost 86 per cent of the currency from circulation, was meant to flush out black money from the economy, slash at the roots of terrorist funding and eliminating counterfeit currency. The Centre defended the decision saying it would lead to long-term gains.

In remarks made at the Congress Working Committee (CWC) meeting in New Delhi, Singh said the economy is running on just ‘one engine of public spending.’ He added that private sector investment has collapsed. The CWC is discussing the current political climate in the country and the upcoming presidential elections.

GDP in the January-March quarter grew at the slowest pace in at least four quarters at 6.1 per cent as against a 7.0 per cent growth in October-December, data released by Central Statistics Office (CSO) last week showed.

“Analysis of policies like demonetisation cannot be done through simple post hoc ergo propter hoc. Because it is after this, so it is because of this…impact analysis of a policy is an extremely sophisticated field in econometrics. I would caution against reading a single number which comes after an event as being reflective of the consequences of the event,” Chief Statistician TCA Anant had told the Indian Express. He added that demonetisation is one of the elements impacting GDP.

Opposition leaders like Mamata Banerjee have also criticised the Narendra Modi government over the note ban decision saying she rightly estimated it would lead to job losses and decline in productivity.

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