Cong warns of negative impact on GDP for next one year

November 17, 2016 20:05

Warning of a negative impact on GDP for next one year, Congress today said Modi government's demonetisation move was more political than economic.

"I confidently say this not an economic 'brahmastra' but a political one," party spokesperson Jairam Ramesh said, stressing the prospects of a recovery in rural, agriculture and unorganised economy in the country are remote in the next year.

He said the move to demonetise currency notes of high denominations will help infuse a lot of cash in the banking sector, making banks rich, but expressed apprehension that its consequence could be banks using this money to write off bad loans like those taken by Vijay Mallya and Lalit Modi and other NPAs.

He, however, admitted that this move could also result in lowering of interest rates, but added that such a possibility looked remote.

"My considered view is that in the next six to 12 months the impact on GDP will not be positive," he told reporters.

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