Former Prime Minister Manmohan Singh has blamed the NDA government’s “mindset” for the lack of consensus on economic reforms that are crucial to India’s ambitions to grow fast and pull millions of its people out of poverty.
Twenty-five years to the day when Singh, as finance minister then, unveiled a historic budget that transformed India from a socialist-style to a market-driven economy, a renewed momentum to address the unfinished agenda of the reforms programme has eluded Prime Minister Narendra Modi’s government.
“The two years that this government has had, they could have been used much purposefully to push the reforms process further,” Singh told HT in an exclusive interview.
“For various reasons this has not happened. Whether it is the GST (goods and services tax), whether it is the land-acquisition bill, whatever the differences among political parties.”
Singh, who was the prime minister from 2004 to 2014, said it was the responsibility of the government of the day to find ways and means to bring about a broad-based consensus.
“That’s a process which simply requires a different mindset from a mindset that says the government’s mindset is to build a Congress-mukt India,” he said. “If your mission is to destroy the Congress party, you can’t expect the Congress party, howsoever well-intentioned you are, to cooperate in that process.”
Key policy moves, including the GST that aims to create a unified national market by replacing string of local levies into a single tax, has remained stuck in Parliament because the Congress and the BJP-led NDA haven’t been able to agree on some contentious points.
“Apart from economic policy measures in the traditional sense of the term, there should be every effort to deal with the social content of economic reforms. Social peace and commercial harmony are essential for any credible reform programme,” Singh said.
He, however, backed the new, but controversial, national income calculation method adopted by the Modi government.
“I don’t think the GDP figures are fudged. However, the methodology has changed,” he said, in contrast to criticism from experts and some Congress leaders who argue that data from other sources such as household spending and corporate earnings do not mirror the spike in GDP numbers.
India grew 7.6% in 2015-16, cementing its place as the world’s fastest growing major economy, outpacing China.
“If monsoon rains are normal, we should be able to grow at the rate of 7 to 7.5% this year,” Singh said.