Former Prime Minister and a member of Rajya Sabha, Manmohan Singh says in an interview with a Hindi daily that Indian economy is experiencing an economic slowdown which is both cyclical and structural.
According to Singh, a slew of mismanaged initiatives including demonetization and a faulty implementation of GST led to the economic downturn.
He said that earlier India had successfully steered through the crises of 1991 and 2008 despite having coalition governments that did not have a huge mandate as the present government.
Manmohan Singh warned that the present government should stop managing the headlines and start engaging with experts and other stakeholders to find solution to different problems that the sectors are facing.
Speaking on the steep truck sales ever recorded, Singh said it means there is fall in consumption demand in essential commodities.
On the reasons that led to slowdown according to the former Prime Minister were rooted in demonetization and faulty and haphazard implementation of Goods and Services Tax.
He said the cash crunch badly hit the informal economy that runs on cash. This huge informal economy does comprise legit activities that do not come under tax threshold.
Similarly, the GST which was ushered in hurry without proper consultations with frequently changing rates caused much confusion. The ill effects of demonetization were supplemented by a poorly implemented GST said Manmohan Singh.
On the recent bank mergers, Manmohan Singh questioned if it was the right time to announce this measure while the banks are reeling under stressed assets. This will unnecessarily shift the focus of banks to integration with other banks which is a complex process.