Former Prime Minister Dr Manmohan Singh on Friday said that no one can deny the sharp slowdown in India's economy and its disastrous consequences, particularly for farmers, youths and the poor.
"There is no one today that can deny the sharp slowdown in India's economy and its disastrous consequences, particularly for farmers, youth and the poor," he said during his address at the National Conclave on Economy here.
The economic growth slowed to 4.5 per cent in the July to September quarter from 7.1 per cent in the corresponding period of last year, the government data showed on Friday.
The economy had a weak performance last quarter with the GDP growth rate dropping to 5 per cent. The slowdown in Q2 FY20 was largely due to a sharp dip in the manufacturing sector and agriculture output, said the Ministry of Statistics and Programme Implementation in a statement.
The former Prime Minister said that it is his belief 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," he said.
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Terming the state of the economy as deeply worrying, he said: "The state of our economy is deeply worrying. 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."
The former Prime Minister said the nation's economy is also a reflection of the state of its society.
"A nation's state of the economy is also a reflection of the state of its society. An economy is a function of the numerous exchanges and social interactions among 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," said the former Prime Minister.
Asserting that there is a palpable climate of fear in the society today, Singh said: "Many industrialists tell me that they live in fear of harassment by the 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 are profound fear and distrust among our various economic participants," added he.
Singh claimed that the 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," he said.
Hitting out at the BJP led Central government, Singh, also a noted economist, said: "The root cause of this is the government's policy doctrine that seems suspect every industrialist, banker, policy-maker, regulator, entrepreneur and citizen. This has halted economic development with bankers unable to lend, industrialists unable to invest and policymakers unable to act."
Singh also slammed the government for demonetisation and said that it has proved to be disastrous.
"And the government has positioned itself as some saviour, resorting to foolhardy moral-policing policies such as demonetisation that have proved to be disastrous," he said.
Terming India as $3 trillion global economic powerhouse driven largely by private enterprise, he said: "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."
"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 coercion or public relations."
However, Singh also noted that with an absolute majority in the Lok Sabha and low global oil prices, this was a once-in-a-generation economy opportunity to catapult India to the next phase of economic development.
"With an absolute majority in the Lok Sabha and low global oil prices, this is 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 our youths," he said.
"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," said Singh.
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