Former Indian PM blames ‘politics of vendetta’ for India's economic slowdown

NEW DELHI: Former Indian prime minister Manmohan Singh urged the Modi government to shun its politics of vendetta which he blamed as a factor in India’s worrying economic outlook.

In a recorded message to Prime Minister Narenda Modi he said the 5 percent growth in India’s Gross Domestic Product (GDP) signalled a prolonged slowdown.

“Our youth, farmers and farm workers, entrepreneurs and the marginalised sections deserve better. India cannot afford to continue down this path. Therefore, 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.”

Dr Singh said the state of the economy was “deeply worrying” and the near zero percent growth of the manufacturing sector proved that it had not fully recovered from the “blunders of demonetisation and a hastily implemented GST.”

“The last quarter’s GDP growth rate of 5 percent 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 slowdown,” he said.

“It is particularly distressing that the manufacturing sector’s growth is tottering at 0.6%.”

Projecting a grim picture of the economy – depressed demand and consumption, lower tax revenues, job losses in formal and informal sector, negative investor sentiment and tax terrorism – Dr. Singh also attacked the Modi-led government for eroding the autonomy of the independent institutions and credibility of government data.

On the Modi government taking 1.76 lakh crore from the Reserve Bank of India (RBI) reserves, Dr. Singh, who has been a former RBI Governor himself, said the resilience of the RBI will be tested after this record transfer to the government.

“In addition, 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 said.

Dr Singh also claimed that the low inflation figures ‘showcased’ by the Modi government has come at the cost of farmers.

“Rural India is in terrible shape. 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 said.

“The Modi government’s policies are resulting in massive jobless growth. 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 our most vulnerable workers,” he added.

Dr Singh’s scathing attack comes after the country reported a slow GDP growth rate of 5 percent for the first quarter of this fiscal, with sharp deceleration in manufacturing output and subdued farm sector activity.