Manmohan Singh Predicts Slowdown Will Last a Few Years, Has 5-Point Guide for PM to Revive Growth
In a scathing attack on the Narendra Modi government’s handling of the economy, former Prime Minister Manmohan Singh has said it may take a few years for the country to get out of this slowdown, provided the Centre acts sensibly now.
Calling for the Centre to come out of its habit of “headline management”, Dr Singh, an eminent economist himself, said the “first step in a crisis is to acknowledge that we are facing one.”
In interviews to Dainik Bhaskar and the Hindu Business Line, he predicted that this slowdown would be “prolonged” as it is cyclical as well as structural. Calling for structural reforms to address the slowdown, he said the government was wasting its historic mandate by not focusing on economic growth.
Former PM & world renowned economist, Dr. Manmohan Singh talks about the deplorable state of the economy. pic.twitter.com/9ijiXJZ3xT— Congress (@INCIndia) September 12, 2019
“We cannot deny that India is facing an economic crisis. Already, a lot of time has been lost. Instead of wasting its political capital by adopting a sector-wise piecemeal approach, or on monumental blunders like demonetisation, the time has now come for the government to carry out the next generation of structural reforms and promote sectors that can generate mass jobs,” Singh said.
When asked to suggest structural reforms to revive the economy, the former PM said five points require immediate attention:
1. Rationalisation of GST, even if it leads to loss in revenue in the short term.
2. Focus on increasing rural consumption and reviving the agriculture sector. He said government can take clues from Congress manifesto, which lays down several measures to free up agriculture market.
3. Liquidity crisis needs to be addressed. He said that not only public sector banks but NBFCs are also suffering.
4. Revive major job-generating sectors such as textile, auto, electronics and subsidised housing. He said easy loans need to be provided for this purpose, especially to MSMEs.
5. Government needs to identify new export markets opening up due to the ongoing trade war between US and China.
He pointed to his own record at steering the economy successfully, first as a finance minister and later as the PM, and said the economy has come to a grinding halt now because of a “man-made crisis”.
Earlier this month, the government had reported that GDP growth rate had dipped to a six-year low of 5 per cent during the first quarter of the ongoing fiscal.
Reiterating that a “hastily rolled-out GST and monumental blunder demonetisation” were to blame for the current situation, he slammed the Modi government for the lack of a focussed approach in tackling the crisis.
He gave the example of the agricultural sector to highlight his point. Farmers were sold the dream of doubling incomes, but agricultural income fell to a 14-year low, crushing the backbone of rural economy, he said.
“This is a government with an overwhelming mandate, a full majority, not once, but twice in a row. When I served as the Finance Minister, or even as the Prime Minister, we did not have such huge mandates. Despite that, we achieved a lot, and successfully navigated through both the 1991 crisis and the 2008 global financial crisis,” he said.
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