Former PM Manmohan Singh slams 'all-round mismanagement' by Modi govt, says we are in midst of 'prolonged slowdown'

HIGHLIGHTS

·         'State of economy is deeply worrying,' former PM Manmohan Singh said

·         The economic policies of the current government are resulting in massive job loses, he said

·         The country's GDP growth slowed to an over six-year low of 5% in the April-June quarter

NEW DELHI: The country is in the midst of a prolonged slowdown, former Prime Minister Manmohan Singh said as he held the "all-round mismanagement" by the Modi government responsible for the ongoing economic crisis in the country.

"State of economy is deeply worrying. Last quarter GDP growth rate of 5% 

signals that we are in midst of prolonged slowdown," the former PM was quoted as saying by news agency PTI.

Singh said that the economic policies of the current government are resulting in massive job loses and urged it to consult "all sane voices" to help the economy get back on track.

"The country has the potential to grow at much faster rate. Reach out to all sane voices to steer economy out of this man-made crisis," he said.

The country's GDP growth slowed to an over six-year low of 5% in the April-June quarter, dragged down by manufacturing sector expansion of just 0.6%, sluggish financial services, farm and construction sectors and a slowdown in consumption.

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

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

"Investor sentiments are in doldrums. These are not the foundations for economic recovery," he added.

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 recovery".

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.

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