To reach $5 trillion mark, economy must grow at 10-12%: Manmohan Singh

Former Prime Minister Manmohan Singh said achieving the $5 trillion target for the economy, set by the Narendra Modi administration, is not possible under current circumstances, with annual growth projected to cool to 6% or slower according to some estimates.

With the growth rate declining, there is no hope of reaching this target by 2024, Singh said on Thursday. “For reaching the $5 trillion mark, the economy would need to grow at 10-12% per annum. What is happening under the BJP (Bharatiya Janata Party) government is that the growth rate is declining. Even the International Monetary Fund (IMF) has come up with a statement that India’s growth rate will be only 6.1% as against 7%, which was mentioned some months ago,” said Singh.

IMF on Tuesday slashed its economic growth forecast for India to 6.1% for the current fiscal from its July projection of 7%, citing weaker than expected outlook for domestic demand. IMF also lowered India’s FY21 GDP growth forecast by 20 basis points to 7.2%.

Singh was addressing a meeting of representatives of the business community on the state of the economy in Mumbai. Maharashtra is heading to the polls on 21 October. Singh, a veteran Congress leader, held the interaction as part of the party’s campaign in the poll-bound state.

Singh, an economist widely credited for ushering in the economic liberalization in India as the finance minister at the time, maintained that respective BJP-led governments at the Centre and in states are obsessed with “fixing blame on its opponents” rather than adopting people-oriented policies.

“They talk about doubling the foreign flows; I don’t think they are in sight. They talk about creating two crore jobs, but exact opposite is happening. The government is only interested in headline management and not concrete steps,” he said.

Responding to finance minister Nirmala Sitharaman’s recent statement that public sector banks had the “worst phase” under the combination of former prime minister Singh and former Reserve Bank of India governor Raghuram Rajan, Singh said: “This government has now been in office for five years. It should have learnt from our mistakes and provided a credible solution for the economy.”

“The industrial slowdown is coming in the way of India optimally utilizing its demographic dividend,” Singh said.

Making a specific pitch for Maharashtra, the former finance minister said that while the state used to be the number one in investment, it was now infamous for being the state with the highest number of farmer suicides.

“Maharashtra used to be number one in investment; today, it is a leader in farmer suicides. They are caught between the trap of low income and high debt. The obsession with low inflation is inflicting misery on our farmers and the Union government’s import-export policy is hurting them further. People from Maharashtra are already grappling with low availability of clean drinking water,” he said.

According to a Right to Information (RTI) query, 396 farmers in Maharashtra committed suicide between 1 January and 28 February this year. Between 2013 and 2018, more than 15,000 farmers committed suicide in the state.