Former Chief Economic Advisor Arvind Subramanian has said that demonetisation was a “massive, draconian, monetary shock” that accelerated the decline in economic growth to 6.8%. In his upcoming book, Of Counsel: The Challenges of the Modi-Jaitley Economy, Subramanian has said that the informal sector had to bear substantial costs due to the ban on high-value currency, IANS reported. The book will be released on December 5. “Demonetisation was a massive, draconian, monetary shock: In one fell swoop, 86% of the currency in circulation was withdrawn,” Subramanian writes in the chapter The Two Puzzles of Demonetisation – Political and Economic. “The real Gross Domestic Product growth was affected by the demonetisation. Growth had been slowing even before, but after demonetisation, the slide accelerated. In the six quarters before demonetisation, growth averaged 8%, and in the seven quarters after, it averaged about 6.8%.”
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