Budget 2017: Why So Confident About Notes Ban Impact, Questions Manmohan Singh

New Delhi: Former Prime Minister Manmohan Singh today reserved his critique on the budget but questioned Finance Minister Arun Jaitley's statement on the impact of demonetisation being transient.

"There is no indication on what has convinced the Finance Minister that the demonetisation effect will be temporary and will not affect the economy," Dr Singh told NDTV.

Commenting that the distinction between planned and non-planned distinction is gone, the former PM also said, "One needs to see how this will impact the economy."

In his budget speech, Mr Jaitley strongly defended the decision to suddenly scrap 500 and 1,000 rupee notes in November, which led to a huge cash crunch for millions.

"Demonetisation was a bold and decisive strike in a series of measures to arrive at a new norm of bigger, cleaner and real," he said, adding, "Pace of remonetisation has picked up, demonetisation effects will not spill over to the next year."

Dr Singh, who was prime minister for 10 years till 2014, said there were "too many things" in the budget for any reaction right away.

His Congress party's vice president Rahul Gandhi called the budget a "damp squib" saying that it lacked vision and did not address key issues like job creation and farmers' crisis.

"We were expecting fireworks, instead got a damp squib," Mr Gandhi told reporters, adding that the budget "lacked vision".

He also said: "The  shock that this government gave through demonetisation, the expectation  was the government will do something for the poor, farmers the unemployed. But there is no clear vision. He (Jaitley) did a lot of sher-o-shayari, gave a good speech but there is no basis."

Mr Gandhi, however, welcomed Mr Jaitley's announcement of reducing cash donations to political parties from the current Rs 20,000 to Rs 2,000.

In the budget, Income tax has been reduced for those who earn between 2.5 to 5 lakh and corporate tax has been cut for companies with an annual turnover of to 50 crores. The Finance Minister has raised the fiscal deficit target to 3.2 per cent of the GDP for 2017-18.

The "highest ever allocation" of 48,000 crores has been announced for the rural job guarantee scheme MNREGA.

Markets were 500 points up after the speech.