Nobel Prize winning economist Paul Krugman speaks during the World Business Forum in New York October 7, 2009. REUTERS/Chip East (UNITED STATES BUSINESS)

On November 8, 2016, PM Narendra Modi took the nation by surprise abolishing Rs 500 and Rs 1,000 banknotes with a stated objective to fight the scourge of black money. Nobel-winning economist Paul Krugman blamed the Modi govt’s note-ban, a hawkish monetary policy of RBI and a strong rupee which makes exports uncompetitive for the tepid growth. He added “Your 6% growth is actually disappointing. You probably should be doing 8% or 9%” According to him India has an odd demonetisation which created some disruption and a monetary policy that looks tighter than one can easily justify. However Krugman termed the situation to be a “little problematic” for the country.


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