During 10 years of UPA, GDP grew at 7.8%, Modi managed just 7.3%, says former PM Manmohan Singh

The former PM made the remarks while interacting with mediapersons at the Rajiv Gandhi Bhavan in Ahmedabad. Describing demonetisation as “an example of ill thought out action with negative effects”, Singh said, “I have thought a lot on demonetisation. It worries me that in a world where economic policy is becoming increasingly complex, we are not developing a culture where policy options are critically assessed and criticisms offered are heard to take corrective action. If leaders only want to be praised, they will hear nothing but praise. This is not a recipe for Vikas.”

ALSO READ: Manmohan Singh on note ban: ‘It was an organised loot, legalised plunder; broke the back of small businesses’

Singh said demonetisation could not achieve its goal of immobilising unaccounted cash. “The Attorney General told the Supreme Court that 25% of the cash with the public would be made valueless. It was also said the government would be able to present the same amount of money without inflationary consequences and distribute it to the ordinary people. However, 99% of the cash was deposited with banks and can now be withdrawn as legitimate money. No money has been distributed to the poor,” he said.

The veteran economist said it was obvious that those who had unaccounted cash managed to get it deposited in banks, perhaps under benami names. Singh also asked if farmers, people connected with the informal sector and traders in mandis who worked on “cash basis” would be investigated by tax officials.

“In the 10 years of UPA-I and II, when I was the PM, our GDP grew at 7.8 per cent on average. This includes the slowdown in the last two years of our government. When the present government took over, they said they would take growth to 8-10 per cent. Modiji so far has led to a growth rate of only 7.3 per cent in the first three years,” Singh said.

Even if growth increases to 6.7% in the fourth year as per the RBI forecast, “Modiji’s average growth rate will be only 7.1%,” he pointed out. “To equal the UPA’s 10-year average, the economy will have to grow at 10.6 per cent in the fifth year. I will be happy if this were to happen, but I do not think it will,” Singh said. He asserted even if the GDP grew to 8 per cent in 2018-19 as claimed by “government spokespersons”, the five-year average growth would still be only 7.2 per cent, much lower than what UPA achieved.

“I hope the PM will take a good look at the ground reality and identify the critical constraints that are depressing the investor sentiment and tackle them. This requires a frank admission of problems and getting out of the culture of constant self-praise,” Singh said.

RELATED REPORT: Bullet train project an ‘exercise in vanity’, says Manmohan Singh

Describing Modi’s claim of doubling farm income in five years as an “election jumla”, Singh said, “The average growth rate of agricultural GDP in the first three years of Modi government is only 1.8 per cent. This is half the average growth of 3.7 per cent that we achieved in 10 years… Doubling in five years requires an annual growth rate of farm income by 14 per cent… I have seen no programme that will achieve such a growth for the country’s farmers. Perhaps this is another election jumla.”

The ex-PM said Modi had a tendency to exaggerate his future plans and claimed if India wanted to become a developed nation by 2022, then it would require voluminous amount bof growth. “Our per capita income is about $5,000 based on purchasing power parity. At the lower end of developed countries, we have Greece with a per capita income of around $25,000. That is five times our per capita income level. To increase our income five fold in five years, we will have to achieve a growth rate of 35 per cent per year. No country has even done this. Is Modji promising he will do that?” Singh said.

Singh said he feared that demonestisation, poor implementation of GST and the rise of tax terrorism under the guise of controlling corruption had seriously damaged investment climate and affected small businesses. “We have a number of nice sounding slogans such as Start-up India, Stand-up India and Skill India. But they are not backed up by effective policies on the ground…Slogans come first and efforts to define policies come much later. This is not helpful,” the veteran Congress leader said.

The former PM also expressed anguish on some of the past comments made by Modi. “He has often said nothing was done in the 70 years before he became the Prime Minister,” Singh said, listing out how life expectancy that stood at 31 years during independence increased to 71 years, literacy went up from 18 per cent to 76 per cent and India attained self-sufficiency in food. “I wish the PM would find more dignified ways to impress crowds and seek their votes without resorting to statements that denigrate our country,” he said.

At a recent rally in Gujarat, Modi had said the Congress was anti-Gujarat and did not initiate any development projects during the UPA regime. “I was really surprised when Modi said Congress and Congress-led governments have always hated Guajratis. Nothing can be farther from the truth,” Singh said, adding both Jawaharlal Nehru and Sardar Patel worked hand in hand to consolidate the gains of freedom. “Nothing is gained, as is often attempted by Modiji, to pit the two great leaders apart,” he said.

However, Singh welcomed the government’s recent move of recapitalisation of public sector banks, saying more plans should be unveiled to the public for discussion on the issue and “not repeat the experience as with GST of not consulting adequately in advance and reporting later”.