MYSURU: Noted economist and retired professor of Jawaharlal Nehru University Center for Economic Studies Arun Kumar said that demonetization move by the Modi government has slowed down the country's economy.Delivering a keynote address at a meet on demonetization organised by the Karnataka Rajya Raitha Sangha, Dalit Sangharsha Samithi, SUCI, and others at Maharaja Centenary Hall on Friday, Arun Kumar, said that demonetization of high value currency notes was never carried out in countries whose economy is doing well, but in countries whose currency lost its value.Demonetization of 1,000, 5,000 and 10,000 currency notes in 1978 during Moraji Desai 's regime had not affected the country's economy as these demonetized currencies constituted just 0.65 percent of the total currency that was in circulation at that time. But this time, demonetized Rs 1,000 and Rs 500 notes constituted 86 percent of the currency that was in circulation and hence the effect is also huge."As per RBI reports, it found just Rs 400 crore worth counterfeit currency, which is very meagre when compared to the nearly Rs 11 lakh crore in demonetized Rs 1,000 and Rs 500 notes that was in circulation before demonetization," he said.He also dismissed the notion that demonetization will prevent funding for terrorists. "Terrorists print fake notes and circulate it. Once they exchange these fake notes with others, it gets into the economy. They will print again and circulate them. So in order to end fake currency racket, the government should crack on the printing of fake notes," Arun Kumar said.Arun Kumar said that demonetization has affected both currency circulation and banking system of the country. The un-organized sector, which is dependent on liquid cash, is the worst hit. "Due to demonetization, the purchase capacity of people has come down, which resulted in slow down of demand and production. This has resulted in drastic drop in investment. Similarly, the bank credit has also been dropped to lowest in 50 years. All these factors are leading the country into a recession and it will take several years to overcome this situation," he said.MLA KS Puttanaiah, KRRS general secretary Badagalapura Nagendra, Karnataka Janashakti state executive committee member Dr Vasu HV, and othes were present.

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