State of economy deeply worrying: Manmohan Singh

Former Prime Minister Manmohan Singh on Sunday said the state of the economy was "deeply worrying" and urged the government to put aside "vendetta politics" and reach out to sane voices and thinking minds to steer the economy out of this "man-made crisis".

The Congress leader said "all-round mismanagement" by the Modi government was responsible for the slowdown.

"The state of the economy today is deeply worrying. The last quarter's GDP growth rate of 5 pc 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 Modi government has resulted in this slow down," he said in a statement.

Targeting the government, Singh said the country's youth, farmers and farm workers, entrepreneurs and the marginalised sections deserve better.

India cannot afford to continue down this path, he said, adding, "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."

Singh said it is particularly distressing that the manufacturing sector's growth is tottering at 0.6 pc.

"This makes it very clear that our economy has not yet recovered from man-made blunders of demonetisation and a hastily implemented GST," he said.

The former PM alleged that institutions are under attack and their autonomy is being eroded.

On government taking Rs 1.76 lakh crore from the RBI reserves, Singh said the resilience of the RBI will be tested after this record transfer to the government.

This, he said, "claims that it does not have a plan on what it will do with this windfall".

Noting that domestic demand is depressed and consumption growth is at an 18-month low and nominal GDP growth is at a 15 year low, he said, "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 recover".

Blaming the Modi government's policies for massive job-less growth, he said 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 most vulnerable workers, he said.

He said rural India is in terrible shape as farmers are not receiving adequate prices and rural incomes have declined.

The low inflation rate that the Modi government likes to showcase comes at the cost of our farmers and their incomes, by inflicting misery on over 50 per cent of India's population, he alleged.

The former prime minister, a noted economist, said the credibility of India's data has come under question under this government.

"Budget announcements and rollbacks have shaken the confidence of international investors. India has not been able to increase its exports to take advantage of opportunities that have arisen in global trade due to geopolitical realignments. Such is the state of economic management under the Modi government," he alleged.

The scathing attack by the former prime minister comes after the country reported a slow GDP growth rate of 5 per cent for the first quarter of this fiscal.

Sharp deceleration in manufacturing output and subdued farm sector activity pulled down India's gross domestic product (GDP) growth to over six-year low of 5 per cent in the April-June quarter of 2019-20.