Manmohan Singh slams govt on declining GDP growth rate
The toxic combination of deep distrust, pervasive fear and a sense of hopelessness in the society is the reason for stifling economic growth, according to Manmohan Singh.
Former prime minister Manmohan Singh on Friday said the current state of Indian economy was deeply worrying and the state of the society was even more worrisome.
His comment came after India's gross domestic product (GDP) growth for the July-September quarter decelerated.
"The rate decline of GDP from 5% to 4.5% is worrisome. Mere changes in economic policies will not help revive the economy," Singh said.
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The toxic combination of deep distrust, pervasive fear and a sense of hopelessness in the society is the reason for stifling economic growth, according to Manmohan Singh.
Singh, an eminent economist himself, said with an absolute majority in Lok Sabha and low global oil prices, the government has a once-in-a-generation economic opportunity to catapult India to the next phase of economic development and create new jobs for hundreds of millions of youth.
Manmohan Singh in a direct message to Prime Minister Narendra Modi said, "I urge the Prime Minister to set aside his deep-rooted suspicion of our society and nurse us back to a harmonious, confident and mutually trustworthy society that can revive the animal spirits and help our economy soar."
"I will argue how the state of our society is even more worrying and that is a fundamental reason for the precarious state of our economy. I will talk today, largely as a concerned citizen and as an economist, so that we can keep politics out of this important discussion," said Singh.
A nation's state of the economy is also a reflection of the state of its society. An economy is a function of the numerous exchanges and social interactions among the people and institutions. "Mutual trust and self-confidence are the bedrock of societal transactions that fosters economic growth. Our social fabric of trust and confidence is now torn and ruptured," he said.
"There is a palpable climate of fear in our society today. Many industrialists tell me they live in fear of harassment by government authorities. Bankers are reluctant to make new loans, for fear of retribution. Entrepreneurs are hesitant to put up fresh projects, for fear of failure attributed to ulterior motives," he said.
Singh said the root cause of this is the government's policy doctrine that seems to suspect every industrialist, banker, policy maker, regulator, entrepreneur and citizen, which has halted economic development with bankers unable to lend, industrialists unable to invest and policymakers unable to act.
"The Modi government seems to view everything and everyone through a tainted prism of suspicion and distrust through which every policy of previous governments was considered of bad intent, every loan sanctioned was undeserving, every new industrial project was crony in nature and so on," he said.
"There is no one today that can deny the sharp slowdown in India's economy and its disastrous consequences, particularly for farmers, youth and the poor. But it is my belief that mere changes in economic policy alone will not help revive the economy. We need to change the current climate in our society from one of fear to one of confidence for our economy to start growing robustly again," he said.
India is now a $3 trillion global economic powerhouse driven largely by private enterprise and it is not a tiny command and control economy that can be bullied and directed at will, he noted.
"Nor can it be managed through colourful headlines and noisy media commentary. Shooting down messengers of bad news or shutting off economic reports and data is juvenile and does not behove a rising global economic powerhouse. No amount of subterfuge can hide the performance and analysis of a $3 trillion market economy of 1.2 billion people. Economic participants respond to social and economic incentives, not diktats or coercions or public relations," he said.
Moreover, Congress chief spokesperson Randeep Surjewala alleged that for the Bharatiya Janata Party (BJP) the GDP was "Godse Divisive Politics".
He was referring to the ongoing row surrounding a BJP MP's remarks on Mahatma Gandhi's assassin Nathuram Godse.
"India's GDP has collapsed to an abysmal 4.5%. We are in a virtual free-fall. This is the lowest GDP quarter in 6 years. But why is the BJP celebrating? Because their understanding of GDP (Godse Divisive Politics) suggests double-digit growth levels. All in the perspective," he said on Twitter.
