Former Prime Minister Manmohan Singh has been critical of the demonetisation and GST roll outs since the beginning. He had categorically mentioned that the economy was running on just one engine of public spending. On Sep 16, in an interview to News 18, Singh has once again warned that the GDP growth will be affected adversely.
Manmohan Singh’s views On Demonetisation–
An acclaimed economist himself, he had said that the Gross Value Addition (GVA) is the true sub-measure of economic activity and it had experienced a steep and sustained fall. He had said,
“Private sector investment has collapsed and the economy is running on just one engine of public spending.”
Singh had predicted a fall in growth due to the note ban announced by Prime Minister Narendra Modi on November 8 last year. His forecast that the GDP figures due to demonetisation would slow down economic growth has proven to be correct.
In June this year, during a meeting with Congress Chairperson, Sonia Gandhi, Singh had specified that the decline in the economic growth is certain and the slowdown was primarily due to demonetisation. He had then expressed serious concern over the situation, particularly the impact of the growth slowdown on job creation.
Singh had said the GVA growth of industry has fallen from 10.7 per cent in March 2016 to just 3.8 per cent in March 2017, a decline of nearly seven percentage points of growth.
“The most worrisome aspect of all this is the impact on job creation. Jobs have been extremely hard to come by for the youth of the nation,” he had said.
The former Prime Minister had also specified that the construction industry, which is one of the largest employment generators in the country, will also be impacted enormously. He had then quoted, “implies loss of millions of jobs for the nation’s workforce.”
Last year, Manmohan Singh had termed in the Rajya Sabha that the demonetisation of Rs. 500 and Rs. 1,000 notes as an “organised loot and legalised plunder.” However, Dr. Singh had said that while he didn’t disagree with the objective of the government, a “monumental mismanagement has taken place. In the long run, we are all dead.”
Manmohan Singh had also predicted a decline of three percent in the GDP, tremendously hurting small industries. “It is no good that on each day banks bring out new notifications. It doesn’t reflect properly on the PMO, Finance Ministry and the RBI,” he had remarked.
Demonetisation and GST decision taken in haste. This will affect GDP growth adversely: Former PM Manmohan Singh to CNN-News18 pic.twitter.com/iT6K3d8kTF
— News18 (@CNNnews18) September 16, 2017
Singh’s views on GST–
Minutes before the midnight launch of Goods and Services Tax (GST), the Narendra Modi government had made a final attempt to convince former Prime Minister Manmohan Singh to attend the historic function, which Singh had declined via an official letter.
Earlier, the Manmohan Singh government was very keen to implement the Goods and Service Tax (GST). However, Singh’s main contention was that BJP-led government had implemented the same in hurry. As pointed out by the economist himself, there were several anomalies in the new method.
While a lot of items were not included in the new tax system, tax rates were many and some rates were very high. He had raised the issue in parliament to include many products, including petroleum products, in the GST net. However, that was not considered.
He had then quoted that the price of domestic LPG, particularly in West Bengal, had increased considerably as a result of this. Singh had also criticized that this could be avoided had the implementation been thoughtfully done.
Singh had also mentioned that ‘lack of preparation for implementing the GST’ was the main problem. He had stated that there was no proper government machinery to deal with the new method and the cases of misdeclaration of accounts may be a great problem in the near future.
Singh had once said towards the end of his tenure as PM, “When I am no longer around, history will look at me more kindly than you all have.”