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On Sunday, September 1, former prime minister Dr Manmohan Singh blamed the Narendra Modi government for the “all-round mismanagement” resulting in the economic slowdown. He urged that the government put aside its politics of vendetta, and to bring the economy out of this “man-made crisis”.
“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 slowdown,” Dr Singh said.
“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,” he added.
According to data released by the National Statistical Office (NSO) in the first quarter (April-June) of the current fiscal, India’s GDP grew at 5 per cent, a 25-quarter low. There was weak agricultural growth and a sub-1 per cent growth in the manufacturing sector. The slowdown was made evident by a visible collapse of consumption demand. This was again evident from the tepid 3.1 per cent growth in private final consumption expenditure, which is an 18-quarter low.
Raising concerns over the manufacturing sector’s slowdown, Dr Singh said that “our economy has not yet recovered from the man-made blunders of demonetisation and a hastily implemented GST”. As compared to 12% in the same quarter last year, the manufacturing sector grew at only 0.6% in Q1.
Ex-PM Manmohan Singh: The state of economy today is deeply worrying. Last quarter's GDP growth rate of 5% signals that were in midst of a prolonged slowdown. India has potential to grow at a much faster rate but all round mismanagement by Modi govt has resulted in this slowdown. pic.twitter.com/q6AS08l0PA
— ANI (@ANI) September 1, 2019
“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,” he said.
Mentioning that over 3.5 lakh jobs have been lost alone in the automobile sector, Dr Singh said that there is a massive job-less growth under this government. He added that the most vulnerable workers will be hurt by the large scale job losses in the informal sector.
Talking about farmer issues, Dr Singh said that rural incomes have declined, and that farmers are not getting adequate prices for their produce. “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 said.
Referring to the monetary surplus of Rs 1.76 lakh crores transferred to the Centre by the RBI, Dr Singh said that after the record transfer of money, resilience of the central bank will be tested.
“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,” he said.
Finance Minister Nirmala Sitharaman, when asked about her comments on Dr Singh’s statement, said, “Is Dr Manmohan Singh saying that instead of indulging in political vendetta they should consult sane voices? Has he said that? All right, thank you, I will take his statement on it. That is my answer.”
“I have no thoughts on what he said. He said it and I listened to it,” she added.
On Friday, August 30, a plan to merge 10 public sector banks into four large entities was unveiled by the Centre. To enable the banks to grow their loan book, an equity of Rs 55,250 crore are to be infused in them.
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