Symposium on Impact of Demonetization on the Indian Economy and the Union Budget 2017 January 20, 2017 Centre for International Business & Policy, BIMTECH, Greater Noida
The ban introduced by the government on high value currency notes on November 8 last year has affected the entire economy and questions are being raised on several issues related to it. Meanwhile, The Finance Minister will soon be presenting his fourth Annual Budget which may offer an opportunity to change the narrative.
Today, a symposium on “Impact of Demonetization on the Indian Economy and the Union Budget 2017” was organized by the Centre for International Business & Policy , BIMTECH which had leading academicians and thought leaders to deliberate on the impact of this disruptive economic phenomenon. The panellists for the discussion were Dr. Rajat Kathuria, Director & Chief Exceutive ICRIER, Prof. Ravi Srivastava, Professor Centre for the Study of Regional Development Jawaharlal Nehru University, Prof Rakesh Sinha, Associate Professor Political Science Delhi University, Mr. Devinder Sharma , an award-winning journalist, writer, thinker and researcher respected for his views on food and trade policy and Prof. J.Shettigar, Professor of Economics at BIMTECH.
The symposium started with the welcome address by Dr. H. Chaturvedi Director, BIMTECH and was later moderated by Prof. Ravi Srivastava who emphasized for an analytical, objective and fact based view of demonetization. Dr. Rajat Kathuria suggested few measures to offset the impact of this exogenous shock like the path of fiscal consolidation, boosting private investment, improving the tax to GDP ratio and ensuring proper infrastructure and readiness for digital transactions.
Mr. Devendra Sharma stated that the policy of demonetization was a self induced recession by the Government and that the focus of policy measures should be gainful employment of the rural sector. He pointed out that the market for short duration crops has been badly hit and this policy has broken the back of farmers already facing tough times due to two back-to-back drought seasons in India. Dr. J. Shettigar pointed that though adverse impact of this policy has been reported through fall in private consumption of around 30% in November itself and several sectors have been badly hit yet there are certain positive developments also like increase in excise duty collection, increase in imports as well as exports after November, 2017. He stressed that it was debatable as to whether the government should patronize sectors such as construction which were bearing the brunt of the demonization policy although they accounted for large amount of black money transactions. He also talked about his expectations from the Union budget 2017 which may have some sops like raising of tax exemption limits or taxation rates.
Dr. Rakesh Sinha called this phenomena as “ Economic Satyagrah” where wealth sharing was becoming as important as wealth creation. He highlighted that this was a measure which could reduce the tyranny of black money. He also talked about the meta-narratives of the current demonetization scenario including the impact on the social and cultural aspects of the society. Dr. Ravi Srivastava pointed out that the extent of loss of national income was still being worked out as the loss in the unorganized sectors of the economy have still not been accounted for fully. He said that demonetization led to a reverse distribution from cash to plastic for the informal economy.
The insightful and enriching talks were followed by a Q &A session where a large number of questions were raised by the students on a variety of issues like liquidity of banks, implementation of the policy, impact on farmers and expectations from the Union Budget.
The symposium ended with a vote of thanks delivered by Dr. Anupam Varma, Dean Academics, Dy. Director, BIMTECH who conveyed heartfelt gratitude towards the panelists for such an interesting and intellectually stimulating session.