New Delhi, Nov 29: Concerned over the sharp slowdown in India’s economy and its disastrous consequences, Former Prime Minister Manmohan Singh suggested ways to Narendra Modi government to help revive the economy.
He stressed that economic growth and development are shaped by the societies in which they operate.
Singh cautioned that mere changes in economic policy alone 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.State of economy is a reflection of state of its society. Our social fabric of trust and confidence is now torn and ruptured.
He also said that a sharp dip from 5 per cent in the first quarter to 4.5 per cent in the second is worrisome. “GDP figures released today are as low as 4.5% per cent .This is clearly unacceptable. Aspiration of our country is to grow at 8-9 per cent. Sharp decline of GDP from 5 per cent in Q1 to 4.5 per cent in Q2 is worrisome. Mere changes in economic policies will not help revive the economy,” he said.
“The state of our society is even more worrying and that is a fundamental reason for the precarious state of our economy,” he said.
Addressing the National Conclave on the Economy at Jawahar Bhawan, former PM recollected his days as a student of economics at Cambridge University in the 50s and said, ” The University teaches us to be intellectually fearless and honest, lucid in expressing our opinion, being open to argument and dissent. Most importantly, it is a place to meet people of various beliefs and ideas and not be confined in an echo chamber. I was taught by renowned economists such as Joan Robinson, Nicholas Kaldor, Richard Kahn on how economic growth and development are shaped by the societies in which they operate. One cannot separate society from the economy in any nation.”
Singh spoke about the state of the Indian economy at the National Economy Conclave where he gave the valedictory address. Commenting on the GDP growth rate of 4.5 per cent, Singh said that there’s still something that’s in a worse state than the Indian economy.
Signalling a palpable climate of fear in the society, Singh said, “Many industrialists are living 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. Technology start-ups that are an important new engine of economic growth and jobs, seem to live under a shadow of constant surveillance and deep suspicion. Policy makers in government and other institutions are scared to speak the truth or engage in intellectually honest policy discussions. There is profound fear and distrust among our various economic participants. Public trust in independent institutions such as the media, judiciary, regulatory authorities, and investigative agencies has been severely eroded. This toxic combination of deep distrust, pervasive fear and a sense of hopelessness in our society is stifling economic activity and hence economic growth.”
Singh urged the Prime Minister to set aside his deep-rooted suspicion of society and built trust so as to revive the economy.
Slamming the Modi government, Manmohan Singh said, “The Modi government seems to view everything and everyone through a tainted prism of suspicion and distrust through which, every policy of previous governments was considered of bad intent, every loan sanctioned was undeserving, every new industrial project was crony in nature and so on. And the government has positioned itself as some saviour, resorting to foolhardy moral-policing policies such as demonetisation, that have proved to be disastrous. For economic growth to revive, it is very important that the government enthuses trust and confidence.”
“India is now a $3 trillion global economic powerhouse driven largely by private enterprise. It is not a tiny command and control economy that can be bullied and directed at will. Nor can it be managed through colourful headlines and noisy media commentary. Shooting down messengers of bad news or shutting off economic reports and data is juvenile and does not behove a rising global economic powerhouse, ” Manmohan Singh said while advising Modi government to change its approach.
He further stressed that no amount of subterfuge can hide the performance and analysis of a $3 trillion market economy of 1.2 billion people. Economic participants respond to social and economic incentives, Not diktats or coercions or public relations.