Cash ban nonsense: Expert

​Hyderabad: Marxist economist Prof Prabhat Patnaik lashed at the Centre and said that demonetisation was aimed at marginalising small and petty production sectors and to boost big capital sector. It would result in forcing people to adopt cashless transactions which would ultimately prove to be costly.

Speaking on ‘Demonetisation of High Denomination Notes and Its Consequences” at a programme organised by the Centre for Trade Unions Congress (CITU) here on Thursday, he said demonetisation was a thoughtless act and complete nonsense.

He cautioned that unless people resisted and protested against, “it would embolden those in the power” to push the poor and marginal sections of people who are dependent on the informal and petty production sector to be the ultimate losers.”

The Professor Emeritus of Centre for Economic Studies and Planning of JNU pointed that petty production sector with 47 per cent contribution providing 80 per cent employment had been crippled with demonetisation. The move had resulted in a major fiscal deficit he said.

This move of the government, he said had resulted in loss of purchasing capacity of the people, fall in sales, piling up of agriculture produce of Rabi due to cash shortage and has left the agriculture sector and rural economy in doldrums slowing down the GDP growth, he added.

Terming the demonetisation exercise as an effort to bring in neo liberal polices to end subsidies, market interventions, minimum support price to agriculture produce and similar protection given to the small scale sector in post Independence era, he said this opened up Indian agriculture sector to the volatile world markets.

He said the Centre told to the Supreme Court that it would maintain a gap of Rs 1.5 lakh crore by not printing enough currency notes. In turn, this had proliferated new illegal activity of exchanging old high denomination notes with new ones for a commission, defeating the very claim of the government on black money, he added.

He said the government, instead of taking punitive action against those resorting to illegal activities, had targeted the entire population and was destroying the economy. Patnaik suggested extending deadline for old notes to be legal tender till March end, print enough currency or allow payments in old currency at milk booths, petrol bunks and medical stores and the like.