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.
VOL. 10 | ISSUE 10 | JAN 2017