Former World Bank economist says GST good economics, demonetisation is not

Kaushik Basu said the collateral damage from demonetisation is likely to far outstrip the benefits

Published: 12th November 2016 01:02 AM  |   Last Updated: 12th November 2016 01:03 AM   |  A+A-


Kaushik Basu says there will likely be a spike in gold and silver prices in India. (2013 File Photo | AFP)


NEW DELHI: Former World Bank Chief Economist Kaushik Basu today said the Modi government's decision to demonetise high denomination currency notes is not 'good economics' and the collateral damage of demonetisation is likely to far outstrip the benefits.

“GST was good economics; the demonetization is not. Its economics is complex and the collateral damage is likely to far outstrip the benefits,” Basu, who was also Chief Economic Advisor in the Ministry of Finance, said in a tweet.

Basu is currently professor of Economics and C Marks Professor at Cornell University.

Basu on November 8 had said that with demonetisation, it is very likely that there will be a spike in gold and silver prices in India.

In its biggest crackdown ever on black money, the government on Tuesday night announced demonetisation of Rs 500 and Rs 1,000 bank notes and asked people holding them to deposit into bank accounts.

Since yesterday, people have been thronging banks amid concerns over exchanging and depositing the scrapped currencies.

People can deposit old Rs 500 and Rs 1,000 notes in their accounts till December 30, 2016, without any limit. Restrictions have also been imposed on withdrawal limit and people can withdraw up to Rs 10,000 per day or Rs 20,000 per week. This limit will be reviewed after few days.

Stay up to date on all the latest Nation news with The New Indian Express App. Download now
(Get the news that matters from New Indian Express on WhatsApp. Click this link and hit 'Click to Subscribe'. Follow the instructions after that.)


Disclaimer : We respect your thoughts and views! But we need to be judicious while moderating your comments. All the comments will be moderated by the editorial. Abstain from posting comments that are obscene, defamatory or inflammatory, and do not indulge in personal attacks. Try to avoid outside hyperlinks inside the comment. Help us delete comments that do not follow these guidelines.

The views expressed in comments published on are those of the comment writers alone. They do not represent the views or opinions of or its staff, nor do they represent the views or opinions of The New Indian Express Group, or any entity of, or affiliated with, The New Indian Express Group. reserves the right to take any or all comments down at any time.

flipboard facebook twitter whatsapp