Manmohan Singh warns again on expected sharp decline in GDP

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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
file photo- Livemint

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.

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.”

6 COMMENTS

  1. While Dr.Singh was right in predicting the slump in the economy, it is child’s play to do this for an advocate of reason and Laissez faire Capitlaism.
    He was dead wrong to state however that the move was right in objective forthwith.
    It was wrong in theory as evidenced by the collapse of statist government worldwide in the twentieth century.
    Singh is avowedly a student of the Keynesian economics which advocates state spending.
    This school of economics is based on a philosophy of collectivism or socialism.
    He is probably unaware of the fundamental law of economics which is Say’s law enunciated by the French eeconomist Jean Baptiste Say. It says, “Products are to be paid for by products.The Fountainhead or root of production is the individual. An individual should be free to think, work to achieve his values, pursue his own happiness and keep the products of his labour. This is the way that Nature has created Man and there are no two ways about it.
    To achieve this in society, Men need fundamental rights. These are the right to life, liberty, pursuit of happiness and private property.
    Force used by other men is the only way that these rights can be infringed.
    So Men need an institution to safeguard these rights. That is the sole purpose of a government based on a proper philosophical view of Man .

  2. Manmohan Singh ‘s Comment on GDP has caught relavance now on GDP fallout.
    As much as Govt may justify the causes for GDP fall , it cannot run away from reality!
    Job losses are worst enemy to Good Governance.
    Nodoubt, PM has concerns for farmers, Infra
    Growth, & New India.
    However ,Tax rate on Petroleum products need to be revisited or debated. RBI should
    Spell out measures for economic growth too.

  3. I simply can’t understand how many examples of stupidity and bhakhts need to go against this modi.He is overzealous idiot who is not nationalist,he is RSS pet.People don’t have idea what 2% of two trillion economy means.The gains of demonetisation as claimed by PM and jaitly are peanuts in front of the losses incurred.

  4. I agree 100% with Manmohan Singh that business had a big hit in last few months due to various reasons and policy of Modi govt.
    But I want to ask a basic question to manmohan singh. Should we keep allowing informal economy to grow as it was being done in his time?
    Shell companies should be allowed to operate?
    Tax theft should go unabetted?
    Few people keep suffering due to paying tax and other enjoy by tax theft all through their life?
    Who believed when modi said in India only 24 lakh people earn more than 10 lakh per year as per income tax? But few millions home worth few crores. Few million luxary cars sold every year.
    As per Manmohan Singh….all these things should go on to show a good GDP. NOOOOOOOOOO

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