Former PM Manmohan Singh. (Express Photo by Prem Nath Pandey) Former PM Manmohan Singh. (Express Photo by Prem Nath Pandey)

Former prime minister Dr Manmohan Singh Sunday blamed the “all-round mismanagement” by the Modi government for the economic slowdown and urged the government to put aside politics of vendetta and reach out to all sane voices to steer the economy out of this “man-made crisis”.

Dr Singh, in a statement, said, “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.”

“Our youth, farmers and farmworkers, 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.

Data released by the National Statistical Office (NSO) Friday revealed that the country’s GDP grew at 5 per cent, a 25-quarter low, in the first quarter (April-June) of the current fiscal. Besides a sub-1 per cent growth in the manufacturing sector and weak agricultural growth, the slowdown was led by a visible collapse of consumption demand, evident from the tepid 3.1 per cent growth in private final consumption expenditure — an 18-quarter low.

Dr Singh raised concerns at the slowdown in the manufacturing sector, which grew at only 0.6% in Q1 as compared to 12% in the same quarter last year. “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.”

Our economy has not recovered from the man made blunders of demonetisation & a hastily implemented GST… I urge the govt to put aside vendetta politics & reach out to all sane voices to steer our economy out of this crisis: Former PM Dr Manmohan Singh #DrSinghOnEconomicCrisis pic.twitter.com/83cBJWHay9 — Congress (@INCIndia) 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 added.

Dr Singh was also scathing in his attack over the increasing unemployment rate. “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,” he said.

On farmer issues, Dr Singh said that they are not receiving adequate prices for their produce and rural incomes have declined. “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,” he said.

Dr Singh also cast aspersions over the monetary surplus of Rs 1.76 lakh crores transferred by the RBI to the Centre, saying that resilience of the central bank will be tested after the record transfer of money. He also said that the credibility of government data and the announcements in this year’s budget have shaken the confidence of foreign investors. “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.

The Congress and other political parties have also criticised the government for the slump in the economy. Senior Congress leader Anand Sharma slammed Finance Minister Nirmala Sitharaman for her assertion that the government is taking steps to clear the path to achieve the goal of a $5 trillion economy. He said the Finance Minister should “stop making boastful claims” and inform the country about the roadmap of the recovery of the Indian economy.

“What we have said about the grave economic crisis in the country has been confirmed. The PM and FM remained in denial, questioning the wisdom of the economists and the motives of the Congress. We are concerned about the collapse, loss of jobs, sharp decline in factory output, negligible capital investments and the huge mismatch in the budget,” he had said.

Meanwhile, the government is expected to announce a spate of decisions to boost the economy. On Friday, the Centre unveiled a plan to merge 10 public sector banks into four large entities and infuse an equity of Rs 55,250 crore in these banks to enable them grow their loan book.

The government has said more boosters are coming amid global headwinds and lingering trade disputes.

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