Economy

Economy hit by climate of fear, says Manmohan Singh

Former Prime Minister Manmohan Singh.

Former Prime Minister Manmohan Singh.   | Photo Credit: Vivek Bendre

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Former Prime Minister warns of disastrous effects of a sharp slowdown in growth .

Reacting to the GDP growth rate for the July-September quarter at 4.5%, a six-year low, announced on Friday, former Prime Minister Manmohan Singh said the figures were “completely unacceptable”, and pointed to a “palpable climate of fear” leading to this state of the economy.

Dr. Singh said there was no denying that the Indian economy was going through a “sharp slowdown” and it would have “disastrous consequences”. Delivering the valedictory address at National Economy Conclave, organised by the Rajiv Gandhi Institute for Contemporary Studies, Dr. Singh said, “This is clearly unacceptable and the aspirations of our people want that this country should grow at 8-9% per annum and, therefore, the sharp decline in growth rate from 5% in the first quarter to 4.5% in the second quarter is worrisome.” 

The former RBI Governor blamed the downward slide on a “palpable climate of fear”.

 

“Many industrialists tell me they live in fear of harassment by government authorities. Bankers are reluctant to make new loans, for fear of retribution. Entrepreneurs are hesitant to put up fresh projects, for fear of failure attributed to ulterior motives,” Dr. Singh said.

Start-ups are living under a shadow of “constant surveillance”, he said.

 “Policy makers in government and other institutions are scared to speak the truth or engage in intellectually honest policy discussions. There is profound fear and distrust among various economic participants,” he said.

Alluding to the government’s efforts to disown data on unemployment, household consumer expenditure and sanitation, Dr. Singh said, “Shooting down messengers of bad news or shutting off economic reports and data is juvenile and does not behove a rising global economic powerhouse.”

 

He added that “diktats or coercions or public relations” will not help in reviving the economy. Dr. Singh said his teachers at Cambridge University — renowned economists such as Joan Robinson, Nicholas Kaldor and Richard Kahn — had taught him that “one cannot separate society from the economy in any nation”.

The public trust in institutions such as the media regulatory authorities and investigative agencies has been eroded, Dr. Singh said. “This toxic combination of deep distrust, pervasive fear and a sense of hopelessness in our society is stifling economic activity and hence economic growth,” he added. 

The former prime minister said that while he was worried about the state of economy, he is more worried about the state of Indian society. In an obvious reference to the month-long strike at JNU, he recalled his days as student of economics at Cambridge University in the 50s. “Universities foster an environment that encourages students to pursue the intellectual truth. The University teaches us to be intellectually fearless and honest, lucid in expressing our opinion, being open to argument and dissent,” he said, adding that Universities can't be echo chambers.

Proof of recession

Reacting to the latest GDP numbers, the Congress said the numbers proved that India was going through a recession. “The economy has been pushed into coma by the BJP, the Prime Minister and the Finance Minister. They owe an explanation to the nation, whether GDP for them, means Gross Domestic Product or for them it means ‘Godse Divisive Politics’; for everything cannot be settled by dividing the people of India,” Congress’s chief spokesperson Randeep Surjewala said.

Also read: Dr. Singh’s prescription to cure India’s economic malaise

“At the end of the day, you need growth, you need jobs, you need agrarian output and the right MSP [minimum support price]. You need growth of trade, you need growth of manufacturing, you need private and public investment, all of which are missing from the government’s agenda,” he added.

“4.5%! Some ppl who made a career by mocking Dr. Manmohan Singh ji are now struggling to oversee the economy,” tweeted senior leader Ahmed Patel. “Fact is, people who run this government don’t care if economic growth falls to 4.5% or 0.5%.They are least interested in these things, they have only one agenda — silencing contrarian voices & the opposition".

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Printable version | Dec 7, 2019 11:54:16 AM | https://www.thehindu.com/business/Economy/45-gdp-growth-rate-unacceptable-worrisome-manmohan-singh/article30117648.ece

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