Former Prime Minister Manmohan Singh on September 12 said that it might take a few years for the country to get out of economic slowdown, provided the Centre acted sensibly right.
In interviews to Hindu Business Line and Dainik Bhaskar, Singh said that the slowdown would be "prolonged' as it was cyclical, as well as structural. Singh also called for structural reforms to address the slowdown and said that the government was wasting the people's mandate by not focusing on economy.
"We cannot deny that India is facing an economic crisis," Singh said.
"Already, a lot of time has been lost. Instead of wasting its political capital by adopting a sector-wise piecemeal approach, or on monumental blunders like demonetisation, the time has now come for the government to carry out the next generation of structural reforms and promote sectors that can generate mass jobs," he added.
Singh, an eminent economist himself, provided five points that require immediate attention. These five points include:
1. Rationalisation of GST, even if it leads to loss in revenue in the short term.
2. Focus on increasing rural consumption and reviving the agriculture sector. Singh said that pointers could be taken from the Congress manifesto, which laid down several measures to free up agriculture market.
3. The former PM said that liquidity crisis needed to be addressed. He said that not only public sector banks but NBFCs were also suffering.
4. Singh also suggested reviving major job-generating sectors such as textile, auto, electronics and subsidised housing. He said easy loans needed to be provided for this purpose, especially to MSMEs.
5. Singh stated that the government needed to identify new export markets opening up due to the ongoing trade war between the US and China.
Singh also reiterated that a "hastily rolled-out GST and monumental blunder demonetisation" were to be blamed for the current situation. Singh, the finance minister responsible for India's open economy policies in the early 90s, also slammed the Narendra Modi government for a lack of focused approach in tackling the crisis.
"This is a government with an overwhelming mandate, a full majority, not once, but twice in a row. When I served as the Finance Minister, or even as the Prime Minister, we did not have such huge mandates. Despite that, we achieved a lot, and successfully navigated through both the 1991 crisis and the 2008 global financial crisis," Singh said.
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