The country is in the midst of a prolonged slowdown, former Prime Minister Manmohan Singh said as he held the “all-rounde mismanagement” by the Modi government responsible for the ongoing economic crisis in the country.
“State of economy is deeply worrying. Last quarter GDP growth rate of 5% signals that we are in midst of prolonged slowdown,” the former PM was quoted as saying by news agency PTI.
Singh said that the economic policies of the current government are resulting in massive job loses and urged it to consult “all sane voices” to help the economy get back on track.
“The country has the potential to grow at much faster rate. Reach out to all sane voices to steer economy out of this man-made crisis,” he said.
The country’s GDP growth slowed to an over six-year low of 5% in the April-June quarter, dragged down by manufacturing sector expansion of just 0.6%, sluggish financial services, farm and construction sectors and a slowdown in consumption.
Singh said it is particularly distressing that the manufacturing sector’s growth is tottering at 0.6 per cent.
“This makes it very clear that our economy has not yet recovered from the man-made blunders of demonetisation and a hastily implemented GST,” he said.
“Investor sentiments are in doldrums. These are not the foundations for economic recovery,” he added.
The former PM alleged that institutions are under attack and their autonomy is being eroded.
On government taking Rs 1.76 lakh crore from the RBI reserves, Singh said the resilience of the RBI will be tested after this record transfer to the government.
This, he said, “claims that it does not have a plan on what it will do with this windfall”.
Noting that domestic demand is depressed and consumption growth is at an 18-month low and nominal GDP growth is at a 15 year low, he said, “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”.
Blaming the Modi government’s policies for massive job-less growth, he said 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 most vulnerable workers, he said.
He said rural India is in terrible shape as farmers are not receiving adequate prices and rural incomes have 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 alleged.
The former prime minister, a noted economist, said the credibility of India’s data has come under question under this government.
“Budget announcements and rollbacks have shaken the confidence of international investors. India has not been able to increase its exports to take advantage of opportunities that have arisen in global trade due to geopolitical realignments. Such is the state of economic management under the Modi government,” he alleged. The scathing attack by the former prime minister comes after the country reported a slow GDP growth rate of 5 per cent for the first quarter of this fiscal.
Sharp deceleration in manufacturing output and subdued farm sector activity pulled down India’s gross domestic product (GDP) growth to over six-year low of 5 per cent in the April-June quarter of 2019-20.
On Saturday, senior Congress leader Digvijaya Singh said PM Modi was worried about Fit India while the economy is facing a slump. “The economy is in bad shape. The government itself is saying GDP is falling. The condition has reached to such an extent that government has to take money from Reserve Bank of India. But the Prime Minister Modi is worried about Fit India,” he told reporters here.
He said “fit India” was necessary but there were issues like malnutrition, poverty, inflation, economy and unemployment which need to be addressed.
Against the backdrop of the Congress’ criticism, Union minority affairs minister Mukhtar Abbas Naqvi on Saturday listed out various measures taken by the Narendra Modi government to make the country a $5 trillion economy.
Naqvi said the security, economy and prosperity of India is in the “safe and honest hands”. He said “inclusive growth” and “development with dignity” of all sections, including minorities, is the priority of the Modi government.
“In the next five years, around 25 lakh youths from minority communities will be provided employment-oriented skill training. In the next five years, five crore students, including 50 per cent girls, will be given various scholarships,” said the minister.