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Manmohan Singh: State of the economy deeply worrying, all round mismanagement led to slowdown

Manmohan Singh: State of the economy deeply worrying, all round mismanagement led to slowdown

Manmohan Singh: State of the economy deeply worrying, all round mismanagement led to slowdown
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By CNBC-TV18 Sept 2, 2019 8:21:31 AM IST (Updated)

Former Prime Minister Manmohan Singh has said that the state of the Indian economy is “deeply worrying” and it is yet to recover from “man-made blunders” of demonetisation and a hastily-implemented goods and services tax (GST) regime.

Former Prime Minister Manmohan Singh has said that the state of the Indian economy is “deeply worrying” and it is yet to recover from “man-made blunders” of demonetisation and a hastily-implemented goods and services tax (GST) regime.

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India’s GDP grew at a slower-than-expected 5 percent in the latest three-month period compared with 5.8 percent in the previous quarter, government data showed last week.
“The state of the economy today is deeply worrying. The last quarter’s GDP growth rate of 5 percent signals that we are in the midst of a prolonged slowdown. India has the potential to grow at a much faster rate but all-round mismanagement by the
Singh has previously seriously criticized the demonetization move of the Modi government, calling it a “black day for economy and democracy” as well as “organised loot and legalised plunder.”
“Domestic demand is depressed and consumption growth is at an 18-month low. Nominal GDP growth is at a 15-year low. There is a gaping hole in tax revenues. Tax buoyancy remains elusive as businessmen, small and big, are hounded and tax terrorism continues unabated. Investor sentiments are in doldrums. These are not the foundations for economic recovery,” Singh’s statement added.
The impact of the prolonged slowdown is starting to show in the manufacturing sector with widespread job losses in the automobile sector, one of the worst impacted industries in the current downturn.
Singh said that the slowdown will further affect jobs in the informal sector and the most vulnerable workers.
“The Modi government’s policies are resulting in massive job-less growth. More than 3.5 lakh jobs have been lost in the automobile sector alone. There will similarly be large scale job losses in the informal sector, hurting our most vulnerable workers.”
Singh, who served as finance minister from 1991 to 1996 and was the 15th governor of the Reserve Bank of India for three years in the mid-1980s, said that institutions are being eroded under the current dispensation, adding that RBI’s resilience will be tested as it transferred Rs 1.76 lakh crore to the government.
“Institutions are under attack and their autonomy is being eroded. The resilience of the RBI will be tested after its record transfer of Rs. 1.76 lakh crores to the government, which claims that it does not have a plan on what it will do with this windfall.”
Singh urged the government to arrest the current slide.
“Our youth, farmers and farm workers, entrepreneurs and the marginalised sections deserve better. India cannot afford to continue down this path. Therefore, I urge the government to put aside vendetta politics, and reach out to all sane voices and thinking minds, to steer our economy out of this man-made crisis,” he concluded.
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