Manmohan Singh Hits Out, Says Economy In A “Vicious Slow Down”

Mumbai: October 17:  “As India’s economic growth is declining year by year, the Economy reaching the target of $5 trillion by year 2024 is not feasible”, said former Prime Minister Dr Manmohan Singh. He also said the economy is in a “vicious slowdown”, which can be salvaged only if the growth rate shoots up.  

"Economy is in a vicious slowdown now. With the way it is going, right now what is, feasible is 5.5- 6 per cent in the short term. But our economy needs a growth rate of 8-10 per cent for employment generation," the former PM said in Mumbai.

He referred to the International Monetary Fund (IMF) predicting that India's growth rate during the current fiscal year would be only 6.1 per cent as against 7.3 per cent mentioned some months ago. "With growth rate declining year after year, I don't think there's any hope of economy reaching the target of $5 Trillion by 2024," Dr Singh said.

The former Prime Minister was addressing the media ahead of Monday's (October 21) voting in Maharashtra for assembly polls.

He said the Centre was “obsessed with” trying to blame its opponents instead of looking for solutions to revive the economy”.

Singh’s remarks came a day after Finance Minister Nirmala Sitharaman said the “Worst phase” of the Indian public sector banks was seen during Singh’s time as prime minister and Raghuram Rajan’s tenure as the Reserve Bank of India governor.

“I won’t like to comment on (Sitharaman’s) that statement, but before one can fix the economy, one needs a correct diagnosis of its ailments and their causes. The government is obsessed with trying to fix blame on its opponent, thus it is unable to find a solution that will ensure revival of economy”, Singh said.

Sitharaman had said that during Rajan’s time as RBI governor, loans were given on the basis of “phone calls from crony leaders”. The finance minister was responding to Rajan’s remark that India’s Fiscal Deficit concealed a lot and could push the country’s economy to a “worrisome situation”.

Singh also said Mumbai and Maharashtra had suffered some of the worst effects of the grave economic slowdown. Maharashtra today was a leader in farmer suicides, according to him, and every third person was jobless.

"Maharashtra used to attract talent from across the nation, sadly that is not the case anymore. The economic scenario of a demographic dividend is suffering. Factories and industry is fast moving out of Maharashtra. The farm sector is under stress too, farmers are suffering," he said.

"Unfortunately, the BJP governments at the Centre as well as Maharashtra are unwilling to implement people-friendly measures.... The government seems to be busy only trying to fix or plug the gaps, not make holistic changes," said the former PM. For a short-term measure, he added, "we need a strong leadership in Delhi."

The Indian economy is currently battling a slowdown and government data showed that the country’s industrial output contracted to 1.1 per cent in August compared to the same month last year. The economic growth rate slipped to a six-year low of 5 per cent in the April-June quarter. This was the fourth straight quarter of slowdown.