india

Updated: Oct 17, 2019 18:34 IST

Former Prime Minister Manmohan Singh on Thursday said that the Indian economy was in a ‘vicious slowdown’ with the growth rate unlikely to go beyond 5.5 to 6% in the near future and there was no hope of reaching the target of a $5 trillion economy by 2024.

“The economy today is in a vicious slowdown. The rate of growth that is feasible in the short term can be no more than 5.5 to 6 per cent. The economy needs to grow at 8 to 10 per cent to solve problems of our economy and deal with pressing issues like unemployment. With growth rate of 5.5 to 6% many of our issues will remain unresolved,” said Singh during a talk on the economy at a function organised by the Congress unit in Maharashtra.

Singh added that there was no hope of a $5 trillion economy by 2024 and this was true of every target the government had set like doubling of farmers incomes or creating two crore jobs.

“To achieve a $5 trillion economy you need a growth rate of 10 to 15 per cent. What has happened in the BJP regime is declining rate of growth year after year. Now even the IMF has forecast growth of 6.1 per cent from 6.7 per cent,” he said.

The former Prime Minister also came down heavily on Union finance minister Nirmala Sitaraman’s statement that public sector banks had performed the worst under him and former RBI governor Raghuram Rajan.

“Whatever happened then, has happened. There were some mistakes. They should have learnt from those mistakes, why are they still affecting the economy? How did Nirav Modi and others run away with public money? You cannot blame UPA year after year. You have completed 5.5 years in government. Merely passing the buck to UPA is not going to solve the problem but only earn you some debating points,” he said.

Singh also said that to fix the economy, one needs correct diagnosis, which had not been done by this government. He slammed the BJP for being “incapable” and “apathetic” in the way they were dealing with the slow down.

Singh also blamed the BJP government for contributing in a big way to the existing distress through demonetisation.

“I had said because of demonetisation there will be loss of 1.5 to 2% of our national income and I have been proven right.”

When asked whether he supported the decision to cut corporate tax, Singh said, “Whatever helps the business..I support the measures to cut corporate tax but the current crisis if shortage of demand and the better route would have been to reduce indirect taxes.”

The former PM also said that addressing unemployment would need credible policies and programmes from the government.

“To reverse the vicious slowdown, labour intensive industries need to be incentivised. It must been seen that imports from abroad do not eat into our economy.”