'Recession' will last a few years: Manmohan Singh
In a scathing attack on the Narendra Modi government’s handling of the economy, former Prime Minister Manmohan Singh has said it may take a few years...
New Delhi: In a scathing attack on the Narendra Modi government's handling of the economy, former Prime Minister Manmohan Singh has said it may take a few years for the country to get out of this slowdown, provided the Centre acts sensibly now.
Calling for the Centre to come out of its habit of "headline management", Dr Singh, an eminent economist himself, said the "first step in a crisis is to acknowledge that we are facing one."
In interviews to Dainik Bhaskar and the Hindu Business Line, he predicted that this slowdown would be "prolonged" as it is cyclical as well as structural.
Calling for structural reforms to address the slowdown, he said the government was wasting its historic mandate by not focusing on economic growth.
"We cannot deny that India is facing an economic crisis. Already, a lot of time has been lost.
Instead of wasting its political capital by adopting a sector-wise piecemeal approach, or on monumental blunders like demonetisation, the time has now come for the government to carry out the next generation of structural reforms and promote sectors that can generate mass jobs," Singh said.
When asked to suggest structural reforms to revive the economy, the former PM said five points require immediate attention:
1. Rationalisation of GST, even if it leads to loss in revenue in the short term.
2. Focus on increasing rural consumption and reviving the agriculture sector. He said government can take clues from Congress manifesto, which lays down several measures to free up agriculture market.
3. Liquidity crisis needs to be addressed. He said that not only public sector banks but NBFCs are also suffering.
4. Revive major job-generating sectors such as textile, auto, electronics and subsidised housing. He said easy loans need to be provided for this purpose, especially to MSMEs.
5. Government needs to identify new export markets opening up due to the ongoing trade war between US and China.
Challenging, says Union Minister
Union Minister D V SadanadaGowda Gowda said the current economic situation in the country was "challenging", but expressed the hope that the measures taken by the union government to address it would see India quickly progress ahead 'in a very short time.'
"In 2008-09 also we had seen global slowdown, but during the time of economic slowdown, the measures taken bythe administrative machinery is important as it plays a crucial role.
I agree that our GDP, that was 8.2 per cent, has now come downto five per cent. This is certainly a challenge for the administration," Gowda said.
Pointing out that the union government has taken a slew ofmeasures to address the situation like for the automobile sector,infusion of funds to banks and addressing of liquidity issuesconcerning MSMEs, he said these were toaddress the "notion of financial instability".
"Because of several such reform measures, in a veryshort time we will progress ahead," he said, noting that inthe past too India had faced even more challenging times, butthe country has "come back".