WEB DESK / AMN
Coming down heavily on the government for declining GDP Growth Rate, former Prime Minister and senior Congress leader Manmohan Singh on Friday said the current state of the Indian economy was “unacceptable”.
His reaction came soon after the second quarter’s growth numbers revealed that the Gross Domestic Product (GDP) had GREW 4.5, the lowest in six years.
Terming the decline from 5% to 4.5% as worrisome, Singh said, “The sharp decline of GDP from 5% in Q1 to 4.5% in Q2 is worrisome. Mere changes in economic policies will not help revive the economy.”
Among the sectors that took a hit this quarter is the manufacturing industry that witnessed negative growth in the second quarter as the sector grew at -1%.
Singh, delivering his valedictory address at a national conclave on the economy here, urged his successor Narendra Modi to set aside “his deep-rooted suspicion” of society and nurse India back to the harmonious, mutually trustworthy society that can help the economy soar.
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Singh said mutual trust is the bedrock of societal transactions fostering economic growth, but “our social fabric of trust, confidence is now torn and ruptured”. The “toxic combination of deep distrust, pervasive fear and a sense of hopelessness in our society” is stifling economic growth, he said.
“The GDP figures released earlier today point the growth rate of our economy in the second quarter of the current fiscal year is as low as 4.5%. This is clearly unacceptable. And, the aspirations of our people want that this country should grow at 8% to 9% per annum. Therefore, the sharp decline in growth rate from 5% in first quarter to 4.5% in second quarter is indeed worrisome,” he said.
Singh, an eminent economist himself, said with an absolute majority in Lok Sabha and low global oil prices, the government has a once-in-a-generation economic opportunity to catapult India to the next phase of economic development and create new jobs for hundreds of millions of youth.
“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,” he said in a direct message to Modi.
While Singh lamented “deeply worrying” state of economy, he said the state of the society is even more worrisome.
“But today, I will argue how the state of our society is even more worrying and that is a fundamental reason for the precarious state of our economy. I will talk today, largely as a concerned citizen and as an economist, so that we can keep politics out of this important discussion,” said Singh.
A nation’s state of the economy is also a reflection of the state of its society, he said.
“An economy is a function of the numerous exchanges and social interactions among the people and institutions. Mutual trust and self-confidence are the bedrock of societal transactions that fosters economic growth. Our social fabric of trust and confidence is now torn and ruptured,” he said.
“There is a palpable climate of fear in our society today. 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,” he said.