Former prime minister Manmohan Singh has criticised the Bharatiya Janata Party government at the centre for its economic policies, saying it has not been able to benefit from falling oil prices and “fortuitous circumstances” to boost the rate of investment in the country.
“The economy is not in as good a shape as it could be, despite the fact that the situation today is much more favourable than it was when we, the Congress-led UPA, were in government,” Manmohan Singh said in an interview to the weekly ‘India Today’.
This was his first wide-ranging interview since he demitted office after the Congress-led government he presided over for 10 years was voted out of power in 2014 general elections.
He told the magazine that the shrinking of the economy was worrying him as “the government is not able to get its act together to persuade the business community to take advantage”.
Manmohan Singh said oil prices had at the time (when the Congress was on power) gone up to $150 a barrel. “Today, they are close to $30 a barrel. This has significantly helped India’s balance of payments, the current account deficit has come down.”
It has also helped the government reduce its fiscal deficit, he said. “In the hands of a purposeful government, this could be an opportunity to step up investment in the economy in a big way.”
The former prime minister pointed out that the rate of investment in India now was “as low as 32 percent” – down three percent from 35 when the Congress was at the peak of its power.
“Yes, it did come down in the last two years of our government but as I said, we had the disadvantage of a sharp hike in oil prices which is not there today.”
He said in all this, India was “obviously missing an opportunity” because the country was a net importer of commodities and needed to benefit from low commodity prices.
“It helps the balance of payments. It helps the control of inflation as well as the fiscal deficit.” Manmohan Singh, who faced criticism over his purported silence when his ministers were accused of widespread graft during his rule, said the incumbent government was facing a “crisis of confidence”.
“People don’t believe the government. When they go and call on the ministers, they say the right things, but when they come out, all of them say that nothing much has changed.”
He said that it also happened because of a “growing view” that the BJP has not delivered “in areas in which it had made huge promises”.
“The PM (Modi) talks about ‘vikas’ but in the growth rate, there is no significant difference from when we left power. In our last year, the growth rate was 6.9 percent while the latest figures today show that it is hovering around 7-7.2 per cent.””So, despite the significant improvement in the balance of payments, the economy is not moving forward which was the aspiration and for which the government had made promises,” the former prime minister said.