Raghuram Rajan, Not Demonetisation, Responsible For Slowdown in Economy: Niti Aayog Vice Chairman Rajiv Kumar
The Indian government, in November 2016 demonetised high value Rs 500 and Rs 1,000 notes with the aimed to curb black money in the system. (Photo Credits: PTI)

New Delhi, Sep 3: Niti Aayog vice chairman Rajiv Kumar on Monday said former Reserve Bank of India (RBI) governor Raghuram Rajan is responsible for the slowdown in country's economy, and not the demonetisation. Rajiv Kumar said Rajan's policies on non-performing assets (NPAs) pushed the country's economy on decline.

"The slowing of growth rate in the post-demonetisation period was not due to the decision to ban notes, but because there was a declining trend in the economy. Starting from last quarter of 2015-16, the growth rate had come down for six successive quarters," Kumar was quoted as saying by news agency ANI. He added that Rajan's revised mechanism of identifying NPAs increased bad debt.

Defending demonetisation, the Niti Aayog vice chairman said a false narrative is being spread about note ban. "This is a completely false narrative and I am afraid leading people like Mr Chidambaram and our former PM (Dr Manmohan Singh) added to this," Kumar said on being asked whether demonetisation slowed down the economy.

Earlier, Kuamr said the objective of the note ban exercise was not to have a large number of unreturned Rs 500 and 1,000 notes but to encourage digital payments and reduce cash transactions. "Who said the aim of demonetisation was to get back less money? Demonetisation has impacted the markets and market psychology," he said.

Last week, RBI's annual report 2017-18 said that on completion of the process of verification of the scrapped Rs 500 and Rs 1,000 notes, it was found that the total value of the demonetised currency returned to the banks stood at Rs 15.3 lakh crore, which amounted to 99.3 per cent of the Rs 15.4 lakh crore worth of such notes in circulation on November 8, 2016.