In his first remarks after the 50-day deadline to deposit old notes lapsed on December 30, President Pranab Mukherjee on Thursday warned that Prime Minister Narendra Modi’s demonetisation drive may lead to a temporary slowdown of the economy. "Demonetisation, while immobilising black money and fighting corruption, may lead to temporary slowdown of the economy,” said President Pranab Mukherjee.
Mr. Mukherjee, who was a former Union Finance Minister, was delivering his New Year message to Governors and Lt. Governors through video conferencing from the Rashtrapati Bhavan.
"We all will have to be extra careful to alleviate the suffering of the poor which might become unavoidable for the expected progress in the long term," Mr Mukherjee said.
He said that while he appreciates the thrust on transition from entitlement approach to an entrepreneurial one for poverty alleviation, he is not too sure that the "poor can wait that long".
"They need to get succour here and now so that they can also participate actively in the national march toward a future devoid of hunger, unemployment and exploitation," the President said.
The recent package announced by the Prime Minister would provide some relief, he added.
The 50-day deadline set by the Centre for depositing of old Rs 500 and Rs 1000 notes, ended on December 30, and the Reserve Bank of India is yet to make public the amount of money that made its way back to its coffers.
On November 9, a day after PM Modi’s announcement, President Mukherjee welcomed the move saying that it "will help unearth unaccounted money”. "President Mukherjee welcomed the bold step of the Government of India which will help unearth unaccounted money & counterfeit currency,” said a statement from Rashtrapati Bhavan.
In the Parliament Winter Session, former prime minister Manmohan Singh termed the demonetisation drive as "organised loot and legalised plunder”. He predicted that it would bring down the country’s GDP by at least 2 per cent.