It appears that the Finance Ministry had a myopic view about
demonetisation. Nobody in the Ministry asked about or suggested that
demonetisation will have an impact on the economies of the SAARC nations. As
the news is emanating from the SAARC countries, they are baffled. If one thinks
India’s GDP’s size is two trillion only, they are mistaken. The collective
impact of SAARC and India’s GDP is humungous. India has bilateral monetary
treaties with most of the neighbouring countries. Economists who are working on
the demonetisation reports say that being a big nation, India should have
considered the devastating impact of demonetisation before taking such a major
policy decision. Finance Ministry officials have the trade data of SAARC
nations and are well aware of the impact of Indian currency on the neighbouring
countries. Economists opine that it will be difficult to generate the
same confidence level in the Indian currency. Trade among neighbouring
countries will take at least two years to normalise. A senior official of the
Ministry informed that nobody asked them about the impact of demonetisation on
the neighbouring countries, so why blame the ministry.
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