In a stinging criticism of the governance of the Narendra Modi government on Sunday, former prime minister Manmohan Singh raised several pertinent points and serious matters affecting the nation and sought immediate course corrections. The issues he raise must be seen beyond the usual sphere of blah-blah indulged in by leaders of various hues, as he supposedly has a better understanding of the economic state of the nation. It also must be admitted that Manmohan cannot be considered less culpable for the present state of affairs prevailing in the country today. A Prime Minister of India for a decade long tenure from the beginning of the 21st century till 2014, Dr Manmohan Singh never spoke up against the wrong doings by most members of his cabinet. He quietly acquiesced to all the evils for which the nation is forced to suffer now.
Dr Singh, now in a new avatar of a person speaking the ‘truth’ about the present economic crisis, dwelt at length on the steady fall in economic growth, the latest indication being that growth has touched a rate of five per cent – from a high of nine per cent during the two UPA terms Singh had presided over. This fall, he reckoned, was hint of a prolonged slowdown of the economy, which the nation can ill afford. He has attributed this fall to the Modi government’s ‘gross mismanagement’ of the economy. He has also pointed out two reasons – not a new revelation – namely the Demonetisation announced by the NDA government in November 2016 and the pre-mature implementation of the Goods and Services Act with many lacunae.
Notably, the start of the 1990s was a period when India faced its worst economic crisis; a time when the government found it difficult even to pay salaries to the large army of government staff. Gold was shipped abroad for pledging with international agencies in order to put money in the national coffers to run government. It must be said to the credit of Dr Singh and the then prime minister PV Narasimha Rao that they managed to weather the storm, and eventually helped strengthen the economy to appreciable levels. A nine-per cent growth rate that the UPA governments achieved after the turn of the century put India on a high pedestal, also giving it the confidence to boast that the nation was set on the road to an economic super power status.
As Dr Singh noted, the manufacturing sector expansion now is at a deep depth of 0.6 per cent as per government statistics itself. This is cause for serious concern to one and all. Simultaneously, the farm sector is failing to show growth. The result, as the ex-PM noted, is that investor sentiments are in doldrums. These, admittedly, do not project a scenario of an economic recovery in the near future.
As someone who handled finance ministry under Rao, and who guided the ministry in later years as PM, Manmohan Singh has taken serious exception to the way RBI funds are being taken away by the government in a desperate attempt to keep the economy going. Such actions, he has warned, would test the resilience of RBI, an institution which he had headed for a period as its governor. According to him, short-term gains are prescription for trouble in future.
Worrisome aspects, as the former PM noted, were also that the GDP growth was now at a 15 year low and consumption growth at an 18 month low. Large scale job losses in the automobile sector as a result of fall in liquidity position and lack of demand arising out of the cash crunch among the citizens, as Singh noted, is a sign of the overall shock the national economy is suffering.
The former PM’s observation about farm distress, joblessness in the rural as well as urban India in almost all sectors is not problems unique to the present times. UPA periods too did not have a good record in addressing such serious issues, and it passed on the buck to the next government. This time however, the slow down seems like it may last long and that could cripple India and put her back for a long time.