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Unemployment In India Due To Demonetisation Says Manmohan Singh – Free PDF Download


What happened?

  • Attacking the Centre, former Prime Minister Dr Manmohan Singh on Tuesday said unemployment is high in the country and its informal sector is in shambles,
  • Following the “ill considered demonetisation decision” taken by the BJP-led government in 2016.
  • He also criticised the central government for not holding regular consultations with the states.
  • Inaugurating a development summit virtually organised by the Rajiv Gandhi Institute of Development Studies, an economic think tank aligned to the Congress ideology in poll-bound Kerala,
  • Singh said temporary measures by the Government of India and the Reserve Bank to paper over the credit problem, Cannot blind us to the looming credit crisis ahead that could affect the small and medium sector.
  • Federalism and regular consultation with states, which was the cornerstone of Indias economic and political philosophy as enshrined in the Constitution,
  • No longer finds favour with the present Central government,” he said.

Who was Affected the most from Demo. & GST?

  • It is obviously the informal sector and the people employed in this sector.


  • Because they mainly deal in Cash.
  • Like- purchasing of raw materials, giving wages to employees etc.
  • Since the cash was squeezed from the system, they were badly affected.

Is there any proof?

Indirectly, this benefited Formal Economy

  • As the informal sector got affected, the supply of goods and services also reduced.
  • But the demand more or less remained the same.
  • Hence to match the demand, the formal sector benefited.

This led to increase in GDP in short run

But in the long Run it also affected the Formal economy.

  • The income of small businesses and people who lost jobs decreased sharply.
  • Hence their demand also started decreasing.

  • This finally led to cut in the production by formal sector economy specially the lower prices goods.

Q) People engaged in which sector of the economy are called red-collar workers?

  1. Primary
  2. Secondary
  3. Tertiary
  4. Quinary



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