Larry Summers on Demonetisation in India – While the Indians are all praise for the demonetisation move taken by PM Narendra Modi, The US Treasury Secretary Larry Summers holds a different opinion of the move. He said that it is the most sweeping currency movement undertaken by any government in past ten years.
He is currently the Charles W. Eliot Professor and President Emeritus at Harvard University.
Remarks by leading Economist Larry Summers on Demonetisation in India
Summers said that it is the normal people of the nation who have been targeted in case of India, rather than the huge black money hoarders who are the root cause of the problem of black money in the country. Such black money hoarders, he said, do not hold wealth in the form of cash, rather have already invested it in gold, bitcoin or in another form.
Further adding, he said that it is supposed to make only a few differences in corruption since the move has not been accompanied by other necessary measures to curb corruption.
“We strongly suspect that those with the largest amount of ill-gotten gain do not hold their wealth in cash but instead have long since converted it into foreign exchange, gold, bitcoin or some other store of value. So it is petty fortunes, not the hugest and most problematic ones, that are being targeted,” said he.
The leading economist said, “Like everyone else, we were surprised by the dramatic action taken by Indian Prime Minister Narendra Modi to demonetise the existing Rs 500 and Rs 1,000 currency notes…The ongoing chaos in India and the resulting loss of trust in the government fortify us in this judgment.”