Former Prime Minister Manmohan Singh on Sunday said the 5% growth in India’s Gross Domestic Product (GDP) signalled a prolonged slowdown and asked the government to engage with “thinking minds by shunning vendetta politics to take the economy out of a man-made crisis.”
In a video statement, he said the state of the economy was “deeply worrying” and the near zero% growth of the manufacturing sector proved that it had not fully recovered from the “blunders of demonetisation and a hastily implemented GST.”
“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 slowdown,” he said.
“It is particularly distressing that the manufacturing sector’s growth is tottering at 0.6%.”
“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 added.
Projecting a gloomy picture of the economy – depressed demand and consumption, lower tax revenues, job losses in formal and informal sector, negative investor sentiment and tax terrorism – Dr. Singh also attacked the Prime Minister Narendra Modi-led government for eroding the autonomy of the independent institutions and credibility of government data.
“India cannot afford to continue down this path”, he said.
On the Modi government taking ₹1.76 lakh crore from the Reserve Bank of India (RBI) reserves, Dr. Singh, who has been a former RBI Governor himself, said the resilience of the RBI will be tested after this record transfer to the government.
“In addition, 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 said.
Dr. Singh also claimed that the low inflation figures ‘showcased’ by the Modi government has come at the cost of farmers.
“Rural India is in terrible shape. 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% of India’s population,” he said.
“The Modi government’s policies are resulting in massive jobless 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,” he added.
In a tweet, Congress leader Priyanka Gandhi Vadra said: “Does the government accept that there is a slowdown or not? The FM needs to get over politicking about the state of our economy and come clean with the people of India. How do they plan to resolve the massive problem they have created if they aren’t even ready to acknowledge it?”
Dr. Singh’s scathing attack comes after the country reported a slow GDP growth rate of 5% for the first quarter of this fiscal, with sharp deceleration in manufacturing output and subdued farm sector activity.
Here is the full text of former PM Manmohan Singh’s statement
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.
It is particularly distressing that the manufacturing sector’s growth is tottering at 0.6%. This makes it very clear that our economy has not yet recovered from the man-made blunders of demonetisation and a hastily implemented GST.
Domestic demand is depressed and consumption growth is at an 18-month low. Nominal GDP growth is 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 Modi government’s policies are 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.
Rural India is in terrible shape. 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.
Institutions are under attack and their autonomy is 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.
In addition, 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.
Our youth, farmers and farm workers, entrepreneurs and the marginalised sections deserve better. India cannot afford to continue down this path. Therefore, I urge the government to put aside vendetta politics, and reach out to all sane voices and thinking minds, to steer our economy out of this man-made crisis.
