Manmohan: Can’t always blame UPA; what did you do in 5.5 years?

Former Prime Minister Manmohan Singh on Thursday said the Indian economy was in a “vicious slowdown” with the growth rate unlikely to go beyond 5.5 to 6% in the

Former Prime Minister Manmohan Singh on Thursday said the Indian economy was in a “vicious slowdown” with the growth rate unlikely to go beyond 5.5 to 6% in the near future and there was no hope of reaching the target of a $5-trillion economy by 2024.

“The economy today is in a vicious slowdown. The rate of growth that is feasible in the short term can be no more than 5.5-6%. The economy needs to grow at 8-10% to solve problems of our economy and deal with pressing issues such as unemployment. With a growth rate of 5.5-6%, many of our issues will remain unresolved,” said Singh, during a talk on the economy at a function organised by the Congress unit in Maharashtra ahead of the polls next week.

Singh said there was no hope of a $5-trillion economy by 2024 and this was true of every target the government had set like doubling of farmers’ incomes or creating two crore jobs. “To achieve a $5- trillion economy target, you need a growth rate of 10-15%. What has happened in the BJP regime is the declining rate of growth year-after-year. Now even the International Monetary Fund has forecast growth of only 6.1%, from 7%,” he said.

The former Prime Minister also came down heavily on Union finance minister Nirmala Sitharaman’s statement that public sector banks performed the worst under him and former RBI governor Raghuram Rajan. “Whatever happened then has happened. There were some mistakes. They should have learned from those mistakes and provided credible solutions to those problems. Why are they still affecting the economy? How did Nirav Modi and others run away with public money? You cannot blame the UPA year after year. You have completed 5.5 years in government. Merely passing the buck on UPA is not going to solve the problem, it will only earn you some brownie points,” he said.

Singh also said that 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 the blame on its opponent, so it is unable to find a solution that will ensure revival of the economy.”

Sitharaman, while delivering a lecture at Columbia University’s School of International and Public Affairs, in New York had said: “Indian public sector banks did not have a worse phase than during the combination of Singh and Rajan, as Prime Minister and the Governor of Reserve Bank of India.”

She said that during Rajan’s time as the governor of RBI, loans were given just based on phone calls from crony leaders and public sector banks in India till today are depending on the government’s equity infusion to get out of that mire.

Singh also blamed the BJP government for contributing in a big way to the existing distress through demonetisation. “I had said because of demonetisation there will be loss of 1.5-2% of our national income and I have been proved right.”

When asked whether he supported the decision to cut corporate tax as a reform to tackle the crisis, Singh said, “Whatever helps the business…I support the measures to cut corporate tax, but the current crisis is of shortage of demand and the better route would have been to reduce indirect taxes.”

The former PM also said that addressing unemployment would need credible policies and programmes from the government to reverse the slowdown such as incentivising labour-intensive industry and ensuring imports do not eat into the economy.

After Singh’s comments, Union railway minister Piyush Goyal, in a sharp rebuttal, said the former prime minister should reflect on his own failures.

“Dr Manmohan Singh should reflect on his own failures, where he went wrong, why he couldn’t maintain a strong economy and give an honest government, why he was so helpless that he had to obey orders from 10 Janpath and had no capacity to take his own decisions,” said Goyal, according to news agency ANI.

Mumbai and Maharashtra most affected by economic slow down, says former PM

Former Prime Minister Manmohan Singh on Thursday said Mumbai and Maharashtra had suffered some of the worse impacts of the economic slowdown. Singh said the “apathy” and “incapability” of this government is affecting the aspirations of millions of people. The former PM said that maximum factory shutdowns occurred in the state, even as imports from China have gone up in a big way and every third person in the state is jobless.

“I have been told of the gloom in the auto hub in Pune, the largest in India and in Nashik, Nagpur, Aurangabad..,There is lack of opportunity in Maharashtra today. Every third person is jobless. Investors have moved out and educated young men and women are accepting low paying jobs. Maharashtra used to be number one in attracting investors and now it is number one in farmer suicides,” said Singh, during his talk on the economy in Mumbai. The function was organized by the state Congress.

He said farmer suicides doubled as the government was obsessed with low inflation rates and water shortage had compounded problems. The BJP governments in the state and the centre are unwilling to adopt people-oriented policies, he said.