Former Prime Minister Manmohan Singh on Thursday argued that India is in the midst of a protracted slowdown, and launched an attack on the Central government over its management of the economy.
Addressing a meeting of top Congress leaders, Singh said the atmosphere in the country is one of “gloom and doom”, and that Prime Minister Narendra Modi’s talk of making India a $5-trillion economy by 2024 looks like a “pipe dream”.
“The dangerous thing about the present situation is that the government is complacent enough not to realise that we are in the midst of a protracted economic slowdown,” he added.
Talking about the slide in GDP growth, he said his government faced a very challenging situation in 2008 because of the international financial crisis. “We faced that situation head-on and converted that crisis into an opportunity to revitalise our economy. The situation our country is facing today, whether you look at agriculture, whether you look at real estate, whether you look at manufacturing…all along the line there is downturn in the economy,” he said.
“And if this situation is not reversed, the worst… would happen on the employment situation. If income growth slows down month after month… the scope for creating more jobs for our young people is going to be very seriously affected,” he said.
“The manufacturing industries are being affected for want of demand, for want of investment incentives and the result is that there is today an all-round atmosphere of gloom and doom,” he said. “There is today an atmosphere that investment is not picking up. The automobile industry is crying for help from the government and the general feeling in the industry is that if the present trend of auto sales is not reversed, there will be at least a million people who would face the prospect of unemployment.”
He added, “One could hope the BJP government would with come up with a package to stimulate demand, to promote investment, but you talk to anybody in the industry today, the general feeling is there is tax terrorism in place of incentivising investment…”
About the $5-trillion economy, Singh said, “Now this looks like a pipe dream. In 2018-19, the economy was of the size of $2.7 trillion and if we have to reach $5-trillion economy by 2024, we need growth rate of 12 per cent per annum in nominal terms and 9 per cent in real terms…”