Singh’s sermons on economy


I believe this year, growth rate will be about 5.5 per cent,” Prime Minister Manmohan Singh hoped in his presentation on the state of Indian...

I believe this year, growth rate will be about 5.5 per cent,” Prime Minister Manmohan Singh hoped in his presentation on the state of Indian Economy in the Parliament on Friday. Portrayed as a man who speaks less, very feeble and whose murmur is difficult to understand in one hearing, Manmohan clarified his stand, for once, at length the reasons for the economic crisis and rupee fall and sought the support of one-and-all at this hour of crisis.

He admitted honestly the flaws in the system and pleaded with his opponents to join him in his endeavour to put back the economy on the fast track. He agreed that, “growth in the first quarter of 2013-14 may be flat, but when the benefits of good monsoon is realized the economy would pick up”. Which means the limping economy may have to wait for the fruits of ‘good monsoon’. Although theoretically Manmohan’s argument has enough strength, will India is capable of realizing the monsoon benefits? One has to wait and watch. However, the opposing schools of economists express ‘no hope’ on his statement; they argue that the economy has already entered the recessionary curve and expected to engulf the entire Asia in the next one year.

They also predict that India’s GDP growth rate may even come down to 3 per cent, from the present level of below 5 per cent. Again, Manmohan comes with a hope saying that India has enough energy to put the economy back on the realms of high stable growth of 6 to 8 per cent, in the next two to three years.

Recounting the measures that his government has taken in the recent past including setting up of Cabinet Committee on Investment (CCI) in order to revive the stalled projects, he wants the people to believe that the government is capable of tackling economic difficulties and do not be carried away by the customary capital inflows and outflows.
Although he agreed that there are certain events and evils in the country which are of concern, the Prime Minister reiterated that the investors have not lost confidence. He stated that the government has no intentions to control capital flow, which is the main reason for rupee fall. Strangely, the Prime Minister is preparing the countrymen to face few more shocks, of course of short term nature, by saying it is the reality of globalised economy and we have already enjoyed benefits of those reforms.
Singing the same old tune of reform process, Manmohan said that reform process would continue. However, this time, the government will have to take up difficult parts of the reform process such as: reduction of subsidies, insurance and pension sector reforms, eliminating bureaucratic red tape, implementing GST etc, as all the easy reforms are already over. And in that process, he is seeking the support of the opposition (all the political parties) to deal with the present economic situation.
Let us all agree on one thing, as Monmohan pointed out, it is time for the country to come together to draft a comprehensive economic policy (which last for a decade despite political change), as it is not only the responsibility of the Finance Ministry, RBI or Centre. Unless political consensus is forged, it would be difficult to carry out the second round of economic reforms, which the international business community is waiting for. And, it is the only answer to wriggle out of the present economic crisis, in which the country is now struggling, or brace the brunt of the economic storm.
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