Economic slowdown is 'deeply worrying': Manmohan Singh

Former Prime Minister Manmohan Singh on Sunday said the state of the economy was “deeply worrying” as India was in the midst of the “prolonged slowdown”.

Singh slammed the Modi government for “all-round mismanagement” of the economy which was yet to recover from the twin shocks of demonetisation and a hastily implemented GST.

The octogenarian leader also urged the Modi government to put aside vendetta politics and reach out to all “sane voices and thinking minds” to steer the economy out of this “man-made crisis".

Singh said that 0.6% manufacturing sector was “particularly distressing” which was a clear signal that the economy had not yet recovered from the “man-made blunders”
of demonetisation and hastily implemented GST.

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 slow down.

Singh’s comments come two days after government data showed that India's economy expanded at its slowest pace in over six years.

He said domestic demand has been depressed, consumption growth was at an 18-month low and nominal GDP growth was 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 said in a statement.

Singh, who ushered in economic reforms as finance minister in 1991, said Modi government’s policies were 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 said.

He said rural India is in terrible shape and farmers were 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% of India’s population,” Singh said.

Referring to the transfer of surplus by the RBI to the government, Singh said institutions were under attack and their autonomy was being eroded.

“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,” the Congress veteran said.

Singh said the credibility of India’s data has come under question, 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,” Singh said.

“Our youth, farmers and farm workers, entrepreneurs and the marginalised sections deserve better. India cannot afford to continue down this path,” the former prime minister said.