The former Prime Minister Dr. Manmohan Singh In an e-mail interaction with the BBC stated that the economic slowdown in the country is “a humanitarian crisis.” Dr. Singh is now a senior leader of the main opposition Congress party. India’s economy was already in the turmoil phase before the beginning of the pandemic – GDP grew at 4.2% in 2019-20, its slowest pace in nearly a decade.
Dr. Manmohan Singh revealed three steps that the Narendra Modi-led BJP government should immediately take to halt the damage of the COVID-19 pandemic. Dr. Manmohan Singh also warned against India following some other nations in becoming more protectionist – imposing high trade barriers duties on imports.
The first state Dr. Singh suggested is that the government should “ensure people’s livelihoods are protected and they have spending power through significant direct cash assistance”. Secondly, he emphasized that the government should make adequate capital available for businesses through “government-backed credit guarantee programmes”. And the third step is it should fix the financial sector through “institutional autonomy and processes”.
Economists have anticipated that India’s GDP for the 2020-21 financial year is likely to dwindle sharply, leading to the worst technical recession since the 1970s.
Dr. Singh further went on to say that “This economic slowdown is caused by a humanitarian crisis. It is important to view this from the prism of sentiments in our society than mere economic numbers and methods.” Dr. Singh focused to a consensus forming among economists over an economic contraction in India in nominal terms, “which if it happens, will be the first time in independent India. I hope the consensus is wrong,” he said.
Talking about the declaration of the first lockdown in India back in March he said, “perhaps a lockdown at that stage was an inevitable choice. But the government’s shock and awe approach to the lockdown has caused tremendous pain to people. The suddenness of the announcement and the stringency of the lockdown were thoughtless and insensitive.”
Dr. Singh believes that “India’s track record as a borrower from multilateral institutions is impeccable, It is not a sign of weakness to borrow from these institutions.”As earlier, taking loans from multilateral institutions like the IMF and World Bank have been taken as signs of India’s economic weaknesses. But now India could “borrow from a position of strength, compared to other developing nations,” Dr. Singh said.