Former Prime Minister Manmohan Singh on Saturday reiterated his criticism of Narendra Modi over the present dispensation’s decisions to demonetise higher value currency notes and “hasty implementation” of Goods and Services Tax.
On demonetisation, the former finance minister said, “This is an uninformed, half-baked crusade on black money where PM Modi painted everyone as a thief, while real culprits have gotten away.” He called the Goods and Services Tax as ‘badly designed and hastily implemented’.
Demonetisation and GST have also “sown a deep-rooted fear of tax terrorism among the business community”. The ex prime minister said, “This attitude of suspecting everyone to be a thief or anti-national, is damaging the democratic discourse, political leaders must stick to the high road. At a time when the economy has slowed down considerably, despite favourable global macro-economic conditions, the fear of tax terrorism has eroded the confidence of the businesses to invest,” he said.
“Just as you were recovering from one blow (of demonetisation), came the GST. Nobody consulted you or tried to understand how your business works,” Singh told a gathering of members of the local business community. “The prime minister is from Gujarat, and he claims to understand Gujarat and the poor more than anyone else. How is it that he never understood the pains his decisions will unleash on you?” Singh asked. “You trusted the prime minister and his promise of ‘acchhe din’ but the hope symbolised in those dreams now lie shattered,” he said.
“These twin blows damaged India’s MSME sector and our businesses,” the senior Congress leader said. There are examples of industrial clusters, both small and big, which sustained monetarily losses and loss of jobs, the economist-turned-politician said. China has been the biggest beneficiary in this as India’s imports from China in FY 2017-18 increased to Rs 2.41 lakh crore from 1.96 lakh crore in FY 2016-17. This unprecedented increase in imports by more than Rs 45,000 crore can be attributed largely to demonetisation and GST.
The senior Congress leader said that the rate of fall of GDP in the first quarter of 2017-18 to 5.7 per cent due to demonetisation was still a “gross underestimate” as the pain of the informal sector was not accounted for. Singh said that every one per cent loss of GDP annually costs our nation Rs 1.5 lakh crore. The impact of this loss was majorly felt on job creation, new opportunities for youth, businesses which had to shut down, and entrepreneurs who feel discouraged and disappointed, he added.
Former Prime Minister Manmohan Singh on Saturday said that the rebound in the second quarter of 2017-18 was a welcome sign, but warned that it was too early to say there is a reversal in decline seen in the past five quarters.
“July-September quarter has registered a growth rate of 6.3 per cent. This is to be welcomed, but is too early to conclude that this represents a reversal of the declining trend seen in the previous five quarters,” the former finance minister told a gathering of businessmen in Surat.
At this rate it is not possible for the Narendra Modi-led government to equal UPA government’s 10-year average growth rate, Singh quipped.
“Some economists believe that the Central Statistics Office (CSO) has not captured the impact of demonetisation and GST on the informal sector that accounts for about 30 per cent of the economy,” Singh said.
The country’s GDP rebounded to 6.3 per cent in July-September due to the growth in the manufacturing sector which has reversed the slowing GDP growth since the past five quarters.
Singh also quoted economists M Govinda Rao and Pranab Sen on the uncertainty about the GDP growth. He said, “The RBI forecasts growth will pick up to 6.7 per cent in 2017-18, still Modiji’s four-year average growth rate will stand at 7.1 per cent.”
Later, Singh responded to reporter’s questions about Modi’s allegation that the Congress and Congress-led governments hated Gujaratis saying, “Nothing can be farther from the truth. I realise that many things are said during elections. But when they are gross distortions, they need to be rebutted.”
He added that Jawaharlal Nehru, the country’s first prime minister, and the “most famous Gujarati” Sardar Vallabhbhai Patel worked hand-in-hand, and “nothing is gained by pitting the two great leaders apart, as is often attempted by Modi.”
“I wish the Prime Minister would find more dignified ways of impressing upon the crowds and seeking their votes without resorting to statements which denigrate our country,” he said. “The prime minister also tends to exaggerate what he will do in future. He was recently quoted in the press as saying that India will become a developed country by 2022,” Singh said.
Singh said on every social indicator, from infant and maternal mortality rates to female literacy, Gujarat has fallen behind the best performing states. The former prime minister said a Congress government in the state will hear the voice of every Gujarati regardless of caste, creed, gender or class.