Manmohan Singh says government is in denial over economic slowdown
Singh, also a noted economist widely credited with ushering in broad economic reforms as the finance minister in Narsimha Rao government in the 1990s, was addressing a gathering at the launch of Montek Singh Ahluwalia’s book, ‘Backstage’.
Former Prime Minister and senior Congress leader Manmohan Singh has hit out at the Central government and said it’s denial of an economic “slowdown” was the reason for a lack of a “credible” solution to fix it.
Singh, also a noted economist widely credited with ushering in broad economic reforms as the finance minister in Narsimha Rao government in the 1990s, was addressing a gathering at the launch of Montek Singh Ahluwalia’s book, ‘Backstage’, said PTI.
“We’ve a government today which does not acknowledge that there is such a word called “slowdown”. If you do not recognise the problems you face, you are not likely to find credible answers to take corrective action,” Singh was quoted as saying.
Singh’s criticism follows the Moody’s slashing India’s growth forecast to 5.4 percent for 2020 from 6.6 percent projected earlier on slower than expected economic recovery. International Monetary Fund (IMF) in January had lowered India’s growth estimate for the current fiscal to 4.8 percent calling for more “ambitious structural and financial sector reform measures” and a medium-term “fiscal consolidation” strategy.
Singh’s criticism is similar to his party colleague and former finance minister P Chidambaram, who had recently accused the government of failing to “acknowledge its mistakes” and living in “denial”.
“We are living in denial and we are ignoring two big elephants in the room -- one is rising unemployment and the other is fall in consumption. Unemployment rises, consumption falls, the Indian economy becomes poorer and not richer,” Chidambaram had said.
While GDP has fallen to an 11-year low of 4.5 per cent in 2019 July-September quarter, agriculture is growing by just 2 percent, while consumer price inflation has risen from 1.9 percent in January 2019 to 7.59 percent in January 2020.
Some indicators, however, have suggested that the economy was showing signs of recovery after gross domestic product (GDP) growth plummeted to a 26-quarter low of 4.5% in the three months ended September 2019.
Finance minister Nirmala Sitharaman had said in Parliament while replying to the debate on the budget that “green shoots” were visible.
“There are seven important indicators which show that there are green shoots in the economy... economy is not in trouble,” she had said in Lok Sabha.
Sitharaman’s optimism was backed by a US-based think tank World Population Review which recently reported that India was developing into an open-market economy after having surpassed the UK and France to become the fifth largest in the world with a GDP of USD 2.94 trillion in 2019.
The Coronavirus outbreak has however raised fresh fears as recently released official trade data reflect its impact on both exports and imports.