Piyush Goyal Lambasts Eminent Economists, Says Demonetisation Will Push GDP Growth

Notwithstanding economists' prediction that demonetisation would hit the country's Gross Domestic Product (GDP) growth, Union Minister Piyush Goyal today said demonetisation will help increase the GDP.

"I don't understand the logic of some eminent economists who have been mentioning that GDP would take a hit by the demonetisation," he said. "If you are moving the informal economy into the formal economy and if the transactions which for years were never reported as part of GDP are now transacted through banking channels, it will only add to the GDP, not reduce it," he added.

Criticising the former Prime Minister Manmohan Singh's comment in Parliament on demonetisation, he said: "I don't know whether Rs 1,86,000 crore lost in the coal scam was disorganised loot or not." He further said: "I thought an illustrated economist would have recognised when an informal economy goes formal, when transactions which for years were never reported have to move through the banking channel, it will give the leg up to the GDP growth, rather than fall by 2 per cent."

Goyal also criticised American Nobel laureate and economist Paul Krugman for describing India's recent demonetisation move as being "unusual".

"In fact, he (Paul Krugman) missed points far too often in the last decade. He always felt that Obama bail out in 2008 was inadequate and it was wrong to fund the private sector. He also felt that trying to protect job through bail-out was not good. Well, facts are before the whole world," Goyal said. "I do not think the Nobel institution gives you a certificate that everything you say is always right," he added.

With inputs from IANS.