Manmohan Singh’s plain speaking on economy

O N Koul
The former economist turned Prime Minister Manmohan Singh is in news these days not for politicking but for his plain talk about the state of economy in the country. He is by all accounts a man of integrity and honesty and a politician of clean image as his personality is unimpeachable. He has talked about the state of the economy and its all time slow and low growth under the NDA Government. The state of affairs of the economy is one of a serious concern as the economy is growing at a low rate and its GDP is 5%. The economy is in recession and all steps should be taken to revive the economy and for its recovery. The inflation in the county is very high and it has robed the common man’s pocket and his purchasing power.
The sky rocketing prices of essential commodities has angered the average citizen and it has impacted adversly the household budget. Not only this the job market is shrinking and there is worse joblessness and the youth are facing unemployment. The factories and industries are firing their employees as there are conditions of recession. The production is low and so is the export and manufacturing of goods and services which affects the exports of the economy and foreign exchange. Manmohan Singh says that all talk of resilience and stable growth of the country is humbug and there is no truth in it.
He further says that the talk and objective of 5 trillion dollar economy is only window dressing and it is painting a rosy picture of the economy and by parroting about 5 trillion dollar economy will not help to revive the sagging morale of the economy. Therefore there is urgent need to reform the economy and taking steps to bring the economy back to the track. But this is no easy task as it requires big and bold steps to revive the economy. According to Manmohan Singh the economy is still not recovering from the twin shocks of the demonitisation and GST as both the decision of Modi government had adverse effect upon the state of economy and on the average Indian citizen. The shocks of these decisions of NDA Government have lowered the growth rate of the country.
Manmohan further says that Modi dispensation is involved in political vendetta and is less concerned about the economy. Modi Government 2.0 is busy in attacking its political adversaries with vengeance and this is a sign of weak governance. In sometimes past and even today there is rift between RBI and the government and this is a great cause of concern. The GDP is at an all time low during part 24 months. However finance minister Nirmala Sitharaman and BJP’s spokesman Sambit Patra have criticized Manmohan Singh’s plain speaking about economy and said that economic fundamentals are strong and capable of absorbing shocks and resilient to recover from the depression. Manmohan Singh recently characterized the current phase of tepid economic growth as a jobless one and all talks of job creation are baseless. These developments as already said are predictable for Consequences of ill advised demonitisation and GST decisions. There are chances of prolonged slow down in, economic growth. Indias struggle to foster an environment where quality jobs are created seems to concide with its period of demographic dividend not so much open unemployment. Of 6.1%, a steady decline in working age population in the job market is a formidable challenge.
Even the Prime Minister Narendra Modi has expressed concern when he talked abot the concern of “Population explosion” in his independence speech. It is a matter of satisfaction that finance Minister Nirmala Sitharaman is willing to engage industry and other stakeholders over the last two weeks. Holistic approach should be followed in removing growth bottlenecks and making India globally competitive rather than adhoc approach to sectoral issues. Modi Governments recapitalization and merger of banks have some positive effects and potential benefits but these steps are not enough to bring the economy back to the track. Infact there is need for sustained and serious economic reforms.
However if the current slowdown in economy is man made, the recovery and durable economic growth can also be done by committed reformers. Government of Indias’ decision and drastic step to merge the banks is shocking for the countrymen. Would merging of ten banks which are tottering with the financially viable banks make four banks stronger or weaker? Is the Government strapped for cash due to fiscal crisis in a sluggish economy with revenues on a free fall cannot afford to shell out money from budget for recapitalization? Can a shortcut of mergers be a proper and viable solution for long term? It seems to be a conspiracy to facilitate dis-investment and ultimately privatization of PSB’s. That mergers will lead to downsizing of NPA’s is another excuse offered by the Government. Will these mergers of banks and associated disruption help economy to recover is a million dollar question? Presenting the union budge 2019-20 finance minister was eager to paint a rosy picture of the Indian economy. However within no time, this show of strength proved hollow. It is ironic that on the same day of merger announcement the Government had to announce the lowest GDP growth in the last six years of 5% for the first quarter of 2019-20. Back to Manmohan Singh’s plain talk, Government should pay heed to it and recover sagging morale of the economy.