Describing the BJP-led government's demonetisation exercise as a reckless step, former prime minister Manmohan Singh today said scrapping higher value currency notes was organised loot and legalised plunder.
Contesting the Cambridge-trained economist, Finance Minister Arun Jaitley said the exercise was an "ethical drive and a moral step" that made corruption difficult. He referred to demonetisation as a watershed moment in the history of the Indian economy
Calling the note ban a "reckless" exercise, Manmohan Singh said during an interactive session with businessmen and traders in Ahmedabad that "demonetisation was an organised loot and legalised plunder".
Singh said "demonetisation was clearly not the way to end the menace of tax evasion and black money."
"Demonetisation has proved to be a mere blister to reap political dividends while the real offenders have escaped. I repeat, this was an organised loot and legalised plunder," the former prime minister said.
Jaitley said the loot is what happened in 2G scam, commonwealth games and allocation of coal blocks, whereas demonetisation was an economic exercise based on ethical and moral rationales.
Taking on the Congress over the issue, Jaitley said the previous Congress governments never took any such big step against black money.
Elaborating on the benefits of demonetisation, the minister said it was aimed at making India a more formal economy with a broader tax base and less cash in the system.