Tag: Manmohan Singh news

Unemployment High Due to ‘Ill Considered Demonetisation’: Manmohan Singh

Singh said temporary measures by the government to paper over the credit problem cannot blind us to the looming credit crisis ahead that could affect the small and medium sector.

Thiruvananthapuram: Attacking the Centre, former Prime Minister Manmohan Singh on Tuesday said unemployment is high in the country and its informal sector is in shambles following the “ill-considered demonetisation decision” taken by the BJP-led government in 2016.

He also criticised the central government for not holding regular consultations with the states.

Inaugurating a development summit virtually organised by the Rajiv Gandhi Institute of Development Studies, an economic think tank aligned with the Congress ideology in poll-bound Kerala, Singh said temporary measures by the government of India and the Reserve Bank to paper over the credit problem cannot blind us to the looming credit crisis ahead that could affect the small and medium sector.

“Unemployment is high and the informal sector is in shambles, a crisis precipitated by the ill considered demonetisation decision taken in 2016,” he said at ‘Pratheeksha 2030’.

The summit was organised to launch a Vision Document, a framework of ideas for the development of Kerala well in advance of the state elections.

He said in Kerala and in many other states, public finances are in disarray with states having to resort to excessive borrowing, which creates an intolerable burden on future budgets.

Also read: Kerala Local Body Polls: BJP’s ‘Saffron Surge’ Claim Can’t Be Dismissed As Hype

“Federalism and regular consultation with states, which was the cornerstone of Indias economic and political philosophy as enshrined in the constitution, no longer finds favour with the present central government,” he said.

Singh said while Kerala’s social standards are high, there are other sectors that need strong attention in the future.

“There are many roadblocks ahead that the state has to overcome. The global downturn of the last two or three years, aggravated by the pandemic, has made the global interface of Kerala more fragile.

“While the increased use of digital modes of work may keep the IT sector afloat, tourism has been hit badly and the rate at which the pandemic is galloping in Kerala poses challenges for this industry”, Singh said.

Noting that the focus on health and education has enabled Kerala to take advantage of job opportunities elsewhere in the country and in all parts of the world, Singh said this has led to a growing stream of remittances from abroad which created a booming real estate sector and sharp growth of the services sector, led by tourism and information technology.

“In the midst of all the gloom, I see the UDF’s steadfast adherence to planned growth with a clear sense of direction and concern for the common man a beacon of hope, not only for Kerala, but for the whole country”, he said.

“When I presented the national budget in 1991 as Finance Minister, I quoted Victor Hugo, who had said, “Nothing is more powerful than an idea whose time has come.”

I get the feeling that the unanimity and clarity displayed by the UDF on the road ahead will lead to Kerala’s idea moment arriving this year”, he said.

As GDP Growth Slips, Opposition, BJP Allies Attack Govt Over Slowdown

Several BJP leaders have felt that their party’s poor electoral performance in Haryana and Maharashtra could be attributed to the economic slowdown.

New Delhi: On the day when India’s quarterly GDP growth dropped to a six-year-low 4.5%, members of the opposition, the ruling party and its allies came together to slam the Union government for its inability to curb the economic slowdown.

Allies question BJP on the economy

The first to question the Union government were the BJP’s own allies. “The state of the economy is alarming, we all are concerned. It is causing alarm because of joblessness and lack of growth which is leading to unemployment.” Shiromani Akali Dal leader Naresh Gujral told the Indian Express.

Gujral went on to say that there was a sense of disquiet among NDA partners and that the BJP had not convened a single meeting with its allies to discuss important matters. “The allies are quite unhappy. The oldest ally, Shiv Sena, has already walked out and others are waiting at the departure lounge. Allies are not vying for positions, but there has to be consultation,” Gujral said.

In a similar vein, Janata Dal (United) leader K.C Tyagi too hit out at the Modi government for failing to protect India’s national assets. The senior leader said that his party was worried about the declining growth rate, the Centre’s plan to privatise public sector enterprises and the all-pervasive agrarian crisis which has led to a steep rise in distress migration.

“The government should not ignore or ridicule warnings of economists or former RBI governors. It should open modes of communication, there should be a meeting of political leaders and economists. People like (former PM) Manmohan Singh should be called to discuss the issue. Because this is not a matter of confrontation, it is a matter of consultation,” Tyagi told the Indian Express.

“Being a socialist party, the JD(U) has serious concerns about the pace in which assets of PSU are being sold to private firms. Selling PSU assets for revenue collection has proved to be a wrong method of dealing with economic crisis. During Atal Bihari Vajpayee’s time, there was a ministry for it, but it did not yield results. Even in Manmohan Singh’s term it happened but with no results,” he said, adding that the government should not have ignored or ridiculed warnings from economists and former RBI governors.

Watch | The Wire Business Report: Understanding the Q2 GDP Slump

Gujaral, on the other hand, pointed out a “talent deficit” in Modi’s cabinet. He said that all those ministries which are being “manned by competent ministers” were doing well but most others were not because of a lack of efficient administrators. Which ministers Gujaral was pointing towards remains unclear.

While the BJP leaders who spoke to the national daily avoided public remarks, they did not downplay the crisis. “When NSSO reports on unemployment and rural consumption reports came to light, our people cited alternative statistics on automobile sale, Ola/Uber services, full airports, cinema earnings to counter. That the finance minister has come to a situation to admit slowdown, if not recession, is a way of acknowledging the situation ultimately,” a BJP leader told the daily on the condition of anonymity.

Another senior BJP MP said, “There is no buoyancy in industry/business these days. Even GST collections are down. It is a matter of concern. We will talk over it. But not on phone please.”

Another saffron party’s functionary said that the economy should be the government’s focus as the “situation doesn’t look promising”. The leader remained doubtful that the finance minister’s budget announcements had any sort of positive impact on the economy.

BJP leaders have felt that the poor electoral performance of their party in Haryana and Maharashtra could have been a result of this economic slowdown that had led to joblessness and general insecurities.

Such has been the impact of the slowdown that the National Democratic Alliance members took turns to question the government in the Rajya Sabha on Friday.

Gujral asked Goyal whether RoDTEP, a scheme to refund taxes to exporters who allege that the new taxes imposed by the Modi government has affected their standing in the global markets, would materialise anytime soon. Union commerce minister Piyush Goyal responded by saying that the scheme was being discussed between finance and commerce ministries.

Similarly, Narendra Jadhav, a nominated member, asked why India had not been able to take advantage of the US-China trade war that had led to manufacturing units fleeing China. Goyal then spoke about the slash in corporate tax and other economic measures to “boost entrepreneurship”.

A view of the Rajya Sabha during ongoing Winter Session of Parliament, in New Delhi, Monday, Nov. 25, 2019. Photo: PTI

A BJP member Lt Gen D.P. Vats (retd) asked Goyal about possible job losses due to increasing automation. The commerce minister replied by saying that although it was true that “modernisation and technology upgradation” affects employment temporarily, “India cannot afford to be left behind”.

“I think, there is no empirical evidence or very detailed evidence of workers losing jobs in a very big measure,” Goyal said.

Opposition reactions

To a question by Trinamool Congress’s Subhasish Chakraborty on whether India is losing its competitive edge in the manufacturing sector, Goyal said that the government was taking steps to address these issues.

Also read: Latest GDP Numbers are ‘Unacceptable’: Manmohan Singh

The Congress spokesperson Randeep Surjewala said that while the government concentrated on politics of religious polarisation for electoral gains, it had no inkling about how to contain the economic slowdown.

“India’s GDP has collapsed to an abysmal 4.5%. We are in a virtual free-fall. This is the lowest GDP quarter in 6 years. But why is the BJP celebrating? Because their understanding of GDP (Godse Divisive Politics) suggests double digit growth levels. All in the perspective,” he said on Twitter.

Trinamool Congress Derek O’Brien too tweeted, “Lowest GDP growth in 26 quarters! No answers from FM. No wonder, full Opposition walked out of Rajya Sabha 40 minutes into the FM’s speech this week. And ministers dozed off in their seats #Parliament.”

CPI(M) general secretary Sitaram Yechury speaking at a conclave too spoke about the state of the economy and said that the lack of coordination between states and the Centre was also responsible for such a poor situation.

“This is the New India. This government wants a Hindu Rashtra which they want to do keeping states at bay. FM (finance minister) says this is not a recession, then what is the solution? The economy is the county won’t do better until there is public pressure. It is complete one-way traffic, no consultation. An authoritative govt which doesn’t want to listen to anyone,” he said.

Even the former secretary to the government Siraj Hussain, who is a specialist in the agrarian economy, joined the ranks of critics. “4.5% is bad news, this means there are no jobs and it really doesn’t bode well for the country, the government needs to give this a very serious thought,” he said.

Latest GDP Numbers are ‘Unacceptable’: Manmohan Singh

On Friday evening, official data released by the National Statistical Office (NSO) showed that India’s quarterly GDP growth slipped to a nearly seven-year-low in the Q2 of this fiscal.

New Delhi: India’s latest quarterly GDP figures have drawn sharp criticism from former prime minister Manmohan Singh, who on Friday called them and the country’s broader economic situation “unacceptable” and “deeply worrying”.

“The GDP figures released earlier today point that the growth rate of our economy for the second quarter of this fiscal year is as low as 4.5%. This is clearly unacceptable. The aspirations of our people want that this country should grow at 8%-9% per annum. The sharp decline of GDP from 5%  in first quarter to 4.5% in second quarter is worrisome,” the senior Congress leader said. 

“It is my belief that mere changes in economic policies will not help revive the economy. We need to change the current climate in our society from one of fear to one of confidence for our economy to start growing robustly again at 8% per annum,” he added.

Singh, who helped open up India to the global economy in the 1990s, was speaking at the National Economy Conclave in New Delhi.

On Friday evening, official data released by the National Statistical Office (NSO) showed that India’s quarterly GDP growth slipped to a nearly seven-year-low in the Q2 of this fiscal on the back of a poor manufacturing performance and lower output in the mining and construction sectors. 

More alarmingly, the data showed that nominal GDP grew only by 6.1% in Q1, the lowest since 2009.

Also read: India’s GDP Growth Drops to 4.5% in Q2 FY ’20, Slowest in Over 6 Years

‘Fear of harassment’ 

In his speech, Singh also noted that while the current state of the Indian economy may be troubling, the state of the country’s society is “even more worrisome”, adding that there exists a “palpable climate of fear” in our society.

“Many industrialists tell me they live in fear of harassment by government authorities. Bankers are reluctant to make new loans, for fear of retribution. Entrepreneurs are hesitant to put up fresh projects, for fear of failure attributed to ulterior motives,” Singh said.

Also read: Impact of Slowdown? Core Sector Output Contracts by 5.8% in October

“Policymakers in government and other institutions are scared to speak the truth or engage in intellectually honest policy discussions. There is a profound fear and distrust among our various economic participants,” he said.

Singh also urged Prime Minister Narendra Modi to help the economy by setting aside his “deep-rooted suspicion of our society”. 

“I urge the prime minister to set aside his deep-rooted suspicion of our society and nurse us back to a harmonious, confident and mutually trustworthy society that can revive the animal spirits and help our economy soar,” Singh said in the conclusion of his speech. 

State of the Economy Is Deeply Worrying: Manmohan Singh

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% of India’s population, the former prime minister alleged.

New Delhi: 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%.

“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.

Also read: Latest GDP Growth Figures Raise Questions About State of Indian Economy

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

On the 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% of India’s population, he alleged.

Watch: How Will RBI’s 1.76 Lakh Crore Reserve Transfer Help The Economy?

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% for the first quarter of this fiscal.

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