Deep, prolonged economic slowdown is inevitable, says Manmohan Singh; offers three steps to help tackle crisis

Former Prime Minister Manmohan Singh has said that a 'deep and prolonged' economic slowdown in India due to the coronavirus pandemic is 'inevitable', and offered three steps to help fight the crisis, during an interview to the BBC.

In the interview, Manmohan Singh said the government should "ensure people's livelihoods are protected and they have spending power through a significant direct cash assistance". He also said that adequate capital should be made available for businesses through "government-backed credit guarantee programmes", and the financial sector should be fixed through "institutional autonomy and processes". These three steps, he said, would help bring normalcy to the country in the coming years.

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"This economic slowdown is caused by a humanitarian crisis. It is important to see this from the prism of sentiments in our society and not mere economic numbers," Manmohan Singh said.

On the matter of the coronavirus lockdown, Singh said that he believes India did what others were doing, and perhaps the lockdown was inevitable. However, he said the Centre's "shock and awe" approach to the lockdown caused tremendous pain to the people, and the suddenness and strictness of the lockdown were insensitive.

According to the report, Manmohan Singh said that borrowing is inevitable for India to fund direct transfers and provide capital to banks and businesses, and it must be done even if the country has to spend 10 percent of the GDP to cater to the military, health and economic challenges.

He also said that India can "borrow from a position of strength" compared to other developing nations.

Singh also warned against India following some countries' trade policies and becoming more protectionist while imposing high duties and trade barriers on imports.