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Raghuram Rajan: I Did Not Favour Demonetization

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Raghuram Rajan

[vc_row][vc_column][vc_column_text]Another jolt to Modi’s “success story”

Amid lot of controversy over why PM chose to go ahead for demonetization of big value currency notes in November last year, former Reserve Bank of India (RBI) governor Raghuram Rajan has triggered another debate by revealing that he did not favour the move as he felt the short term economic costs associated with “such a disruptive” decision would outweigh any longer term benefit.

Rajan made the revelation in his book “I do what I do” to be released next week. It contains Rajan’s speeches on wide range of issues as RBI governor. However, he maintains that the book does not tell-all. His uneasy relationship and differences with the present government were clearly indicated in the short introductions and postscripts along with the pieces.

Rajan set aside all speculation that preparations for scrapping high-value bank notes got underway many months before PM made surprise announcement on November 8.  He said, “At no point during my term was the RBI asked to make a decision on demonetization.” 

Rajan, demitted office on September 3 last year, precisely 35 days before PM announced for demonetization of rupees 1000 and 500 bank notes.  He says that he chose not to speak on India for a year because he didn’t want to “intrude on his successor’s initial engagement with the public”. Former RBI governor now teaches economics at Chicago University.

While deliberating on his initial response to the government’s proposal for demonetization, Rajan writes, “I was asked by the government in February 2016 for my view on demonetization, which I gave orally. Although there might be long-term benefits, I felt the likely short-term economic costs would outweigh them.”   He clearly said, “I made these views known in no uncertain terms.”

The lingering impact of demonetization on the economy is far and wide. The latest government data showed that the GDP growth sharply slowed from 7 percent in October-December (2016) quarter to 6.1 percent in January-March and 5.7 in Aril-June 2017. This was primarily caused by the cash squeeze weakening customer spending capacity discouraging new investments. However, the government insists that the economic slowdown was not entirely caused by demonetization.

But former RBI governor Raghuram Rajan, while responding to questions by a national daily described the GDP deceleration “as the costs of demonetization upfront.”

“Let us not mince words about it – GDP suffered. The estimates I have seen range from 1 to 2 percentage points, and that’s a lot of money – over Rs 2 lakh crore and may be approaching Rs 2.5 lakh crore,” he said.

After the demonetization, Nobel Laureate and eminent economist Amartya Sen had said, “The demonetisation of currency was a despotic act as the government broke the promise of compensation that comes with a promissory note.”

“Only an authoritarian government can calmly cause such misery to the people – with millions of innocent people being deprived of their money and being subjected to suffering, inconvenience and indignity in trying to get their own money back,” he had added.

Kaushik Basu, another prominent economist wrote in New York Times, Demonetization was ostensibly implemented to combat corruption, terrorism financing and inflation. But it was poorly designed, with scant attention paid to the laws of the market, and it is likely to fail. So far its effects have been disastrous for the middle- and lower-middle classes, as well as the poor. And the worst may be yet to come.” 

Former Prime Minister Dr. Manmohan Singh, who had earlier been RBI governor and country’s Finance Minister, said, “In my opinion that the way the scheme has been implemented will hurt agricultural growth in our country, will hurt small industry, will hurt all those people who are in the informal sector of the economy. And my own feeling is that the national income, that is the GDP, can decline by about 2 per cent as a result of what has been done. This is an underestimate.”[/vc_column_text][/vc_column][/vc_row]

India News

Telegram CEO Pavel Durov criticises India restriction, says leak networks shifted to other apps

Telegram founder Pavel Durov has responded to India’s temporary restriction on the platform ahead of the NEET-UG 2026 re-examination, arguing that the move affected ordinary users without stopping alleged leak networks.

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Telegram founder and CEO Pavel Durov has criticised India’s decision to temporarily restrict access to the messaging platform, arguing that the move failed to curb alleged exam leak operations and instead affected millions of legitimate users.

The restriction was imposed ahead of the NEET-UG 2026 re-examination as authorities sought to prevent the spread of leaked exam-related material and disrupt networks allegedly involved in malpractice.

In a public response, Durov said the action had inconvenienced a large number of users across India while those responsible for sharing leaked content had simply migrated to alternative platforms.

According to Durov, restricting access to Telegram did not eliminate the problem authorities were trying to address. He claimed that groups involved in distributing exam-related leaks quickly shifted their activities elsewhere, raising questions about the effectiveness of platform-specific restrictions.

The temporary curbs were announced by the government in the lead-up to the NEET-UG re-test scheduled for June 21. Officials said the move was aimed at safeguarding the integrity of the examination process following concerns about the circulation of leaked material online.

The restriction is currently expected to remain in place until June 22.

Durov also stressed that millions of Indian users rely on Telegram for communication, education, business activities and community engagement. He argued that measures targeting an entire platform can have wider consequences for users who have no connection to alleged wrongdoing.

The government’s action came amid broader efforts to prevent cheating and malpractice in competitive examinations. Authorities have been closely monitoring digital platforms and messaging services after reports that exam-related content was being circulated through online channels.

The debate has sparked discussions about how governments and technology platforms should balance examination security with access to digital communication services. While officials maintain that strong measures are necessary to protect the fairness of high-stakes examinations, critics argue that restrictions on entire platforms may not effectively stop determined offenders.

For now, Telegram remains at the centre of the discussion as authorities continue efforts to ensure a fair and secure conduct of the NEET-UG 2026 re-examination.

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Telegram restricted ahead of NEET-UG re-exam, NTA backs move to curb exam fraud

NTA has welcomed the Centre’s decision to temporarily restrict Telegram ahead of the NEET-UG 2026 re-examination, citing the need to prevent fraud and misinformation.

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NEET

The Centre has imposed temporary restrictions on messaging platform Telegram ahead of the NEET-UG 2026 re-examination, with the National Testing Agency (NTA) welcoming the decision as part of efforts to prevent exam-related fraud and misinformation.

The temporary curbs will remain in place until June 22, a day after the NEET-UG re-exam scheduled for June 21. Authorities said the action was taken following concerns that the platform was being misused by cheating networks and individuals circulating misleading claims related to the examination.

NTA says move aimed at protecting exam integrity

According to the NTA, the restrictions are intended to safeguard candidates from fraudulent activities and false information that could affect the fairness of the examination process. The agency stated that maintaining the integrity of the re-examination remains a priority as lakhs of students prepare to appear for the test.

The NEET-UG re-exam is being conducted after the original examination was cancelled amid allegations of question paper leaks and irregularities. Since then, authorities have been monitoring online platforms for suspicious activity and misleading content targeting candidates.

Restrictions linked to concerns over fake paper leak claims

In recent weeks, several reports surfaced about Telegram channels allegedly offering access to leaked examination papers. The NTA had repeatedly advised students not to trust such claims and referred suspicious links and posts for verification by cybercrime authorities. No official confirmation of any genuine leaked re-exam paper had been issued.

Authorities believe the temporary restrictions will help limit the spread of fake content and reduce opportunities for organised exam fraud in the days leading up to the re-test.

Wider efforts to secure the re-examination

The government and examination authorities have introduced several measures ahead of the re-exam, including monitoring social media platforms and creating channels for reporting suspicious claims related to NEET-UG 2026. The NTA has also urged candidates to rely only on official communications for updates regarding the examination.

With the re-examination approaching, officials say the latest action is part of a broader effort to ensure a fair and transparent process for all candidates.

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Abhishek Banerjee says will not bow to BJP after nearly 11 hours of ED questioning

After spending nearly 11 hours before the Enforcement Directorate, TMC leader Abhishek Banerjee said he would not bow to the BJP and accused the ruling party of using investigative agencies for political purposes.

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Abhishek Banerjee

Trinamool Congress leader and Diamond Harbour MP Abhishek Banerjee on Tuesday said he would not bow to the BJP after spending nearly 11 hours being questioned by the Enforcement Directorate (ED) in connection with an ongoing investigation.

Speaking after the questioning, Banerjee alleged that central agencies were being used to target opposition leaders and asserted that he would continue his political fight despite what he described as sustained pressure.

The TMC leader has repeatedly maintained that investigations involving him are politically motivated, a charge he has made on several previous occasions while appearing before central agencies.

His appearance before the ED comes amid a period of heightened political activity and multiple investigations involving leaders in West Bengal. Recent days have also seen Banerjee face summons and questioning in separate matters by state investigative agencies.

After leaving the ED office, Banerjee reiterated that he would not be intimidated and said he remained committed to his political responsibilities. He also accused the BJP of attempting to weaken opposition parties through investigative action, an allegation that the BJP has rejected in the past.

The Enforcement Directorate has not publicly commented on Banerjee’s remarks. The investigation related to the questioning remains ongoing.

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