Put aside vendetta politics to steer our economy out of this man-made crisis: Manmohan Singh


Former Prime Minister Dr Manmohan Singh has asked the Centre’s Narendra Modi government to give up its vendetta politics to save the economy, which he said was reeling under a man-made crisis.

file photo- Livemint

In a video message, Dr Singh said, “The state of the economy today is deeply worrying. The last quarter’s GDP growth rate of 5% signals that we are in the midst of a prolonged slowdown. India has the potential to grow at a much faster rate but all-round mismanagement by the Modi government has resulted in this slowdown.”

His message came just days after the GDP data showed that the Indian economy had registered a growth of only 5% in the first quarter of 2019-20. This was considerably less than the same quarter in the last financial year.

Dr Singh said, “Our youth, farmers and farmworkers, entrepreneurs and the marginalised sections deserve better. India cannot afford to continue down this path. Therefore, I urge the government to put aside vendetta politics, and reach out to all sane voices and thinking minds, to steer our economy out of this man-made crisis.”

Dr Singh, who’s widely deemed as the architect of the economic liberalisation in India, also said that it was ‘particularly distressing that the manufacturing sector’s growth is tottering at 0.6%.’ He said, “This makes it very clear that our economy has not yet recovered from the man-made blunders of demonetisation and a hastily implemented GST.  Domestic demand is depressed and consumption growth is at an 18-month low. Nominal GDP growth is at a 15 year low. There is a gaping hole in tax revenues. Tax buoyancy remains elusive as businessmen, small and big, are hounded and tax terrorism continues unabated. Investor sentiments are in doldrums. These are not the foundations for economic recovery.”

The former Prime Minister had predicted the economy to shrink by 2% while speaking in parliament soon after PM Modi announced the note ban in November 2016. Months later, his prophecy came true as the economy indeed slowed down by 2%.

“The Modi government’s policies are resulting in massive job-less growth. More than 3.5 lakh jobs have been lost in the automobile sector alone. There will similarly be large scale job losses in the informal sector, hurting our most vulnerable workers,” Singh added.

He said that rural India was in terrible shape and farmers were not receiving adequate prices since rural incomes had declined. “The low inflation rate that the Modi government likes to showcase comes at the cost of our farmers and their incomes, by inflicting misery on over 50 per cent of India’s population,” he added.

The former PM, also an economist of repute, said that institutions were under attack and their autonomy is being eroded. Referring to the Reserve Bank of India’s recent decision to transfer Rs 1.76 trillion surplus money to the government, Dr Singh said, “The resilience of the RBI will be tested after its record transfer of Rs. 1.76 lakh crores to the government, which claims that it does not have a plan on what it will do with this windfall.”