Five Suggestions by Former PM Manmohan Singh To Tackle The Economic Slowdown

Former Prime Minister Manmohan Singh has time and again put forward his views on the state of the economy. At the time of demonetisation he said that it is a "monumental blunder".  Again Singh broke his silence on the current economic slowdown.

Prime Minister Manmohan Singh on September 12 said that it might take a few years for the country to get out of economic slowdown, if the government acted sensibly.

Singh also said that there is no doubt that India is going through an economic slowdown. In exclusive interviews to Hindu Business Line and Dainik Bhaskar, Singh added further that the slowdown would be "prolonged' as it is cyclical, as well as structural. Singh also emphasized on the need for structural reforms to address the slowdown and said that the government was wasting the people's mandate by not focusing on economy.

"Already, a lot of time has been lost. Instead of wasting its political capital by adopting a sector-wise piecemeal approach, or on monumental blunders like demonetisation, the time has now come for the government to carry out the next generation of structural reforms and promote sectors that can generate mass jobs," he added.

"This is a government with an overwhelming mandate, a full majority, not once, but twice in a row. When I served as the Finance Minister, or even as the Prime Minister, we did not have such huge mandates. Despite that, we achieved a lot, and successfully navigated through both the 1991 crisis and the 2008 global financial crisis," Singh said.

Singh, an eminent economist himself and under whose helmship the country witnessed multiple slowdowns and tackled many crisis.  In order to tackle the economic slowdown, Singh provided five points that require immediate attention of the current regime. These five points include:

1. His immediate suggestion is about the Rationalisation of GST, even if it leads to loss in revenue in the short term. As many sectors are demanding the rationalisation of GST.

2. He also suggested that the focus of the government should be on increasing rural consumption and reviving the agriculture sector. Singh said that pointers could be taken from the Congress manifesto, which laid down several measures to free up agriculture market.

3. The former PM said that liquidity crisis needs to be addressed and tackled immediately. He said that not only public sector banks but also NBFCs were also suffering.

4. Singh added that the urgent need is to revive job-generating sectors such as textile, auto, electronics and subsidised housing. He said easy loans needed to be provided for this purpose, especially to MSMEs.

5. Singh also threw light on the ongoing trade war between US & China and suggested that the government needed to identify new export markets opening up due to the ongoing trade war between the US and China. 

Singh also said that a "hastily rolled-out GST and monumental blunder demonetisation" were to be blamed for the current situation. Singh, the finance minister responsible for India's open economy policies in the early 90s, also slammed the Narendra Modi government for a lack of focused approach in tackling the crisis.