Demonetisation will boost GDP growth: Piyush Goyal

Goyal said those who are unable to digest the damage are uniting to criticise the decision

Union minister Piyush Goyal on Friday questioned former Prime Minister Manmohan Singh's assertion that the Centre's demonetisation move would lead to a 2% drop in the GDP and contended that the step would, in fact, result in an increase in the GDP growth rate.

"Manmohan Singh is a noted economist, but we are also not illiterate. I fail to understand the logic put forward by him that the GDP will decline by 2% after demonetisation," the Union Minister of State for Power (independent charge) told reporters after taking part in a rally to support the move.

"If a business is conducted in black money, it does not get accounted in the GDP, but if it is deposited in the banks and tax is levied on it, then it will enhance the GDP," Goyal said.

The rally was organised by BJP national general secretary Kailash Vijayvargiya in support of Prime Minister Narendra Modi's demonetisation decision announced earlier this month.

When asked about how much black money was expected to be flowing into the banks post demonetisation, Goyal, taking a jibe at the previous UPA regime, said that those in the previous government would be in a better position to answer that as "scams were rampant during their 10-year rule".

"The present government has just launched a drive to put an end to it and will remain firm on it," he said.

Goyal said the decision to invalidate Rs 500 and Rs 1,000 currency notes will "protect the honour of the honest", while it will prove to be "detrimental for the corrupt".

"Those who are unable to digest the damage are uniting to criticise the decision," he added.

Goyal described the prime minister's demonetisation decision as "bold" and claimed that though the people were facing difficulties, they were in support of the move because they had elected Modi for a "transparent government".

"People facing difficulties are aware that it is temporary and there will be benefits in the long run," he said.