New Delhi: Evaluating Prime Minister Narendra Modi government’s performance on the economic front, his predecessor and noted economist Dr Manmohan Singh said the NDA dispensation had not been able to touch the average growth rate of even 8 per cent despite having a full majority.
Singh said if his government also had a full majority, then economic growth rate under UPA regime would have touched the double-digit figure. He said even without the full majority, his government was able to provide an average growth rate of 8.1 per cent in his 10-year tenure.
Singh, 87, said he was disturbed by what he said was the constant attempt of the Modi government to undermine democratic institutions. Though he has kept himself aloof from campaigning in the ongoing Lok Sabha elections, Singh has been constantly observing and assessing the election mood.
Singh shared his views with Dainik Bhaskar’s political editor Hemant Atri. Excerpts from the interview.
Q: Like the current Prime Minister, you are also from a very humble background, yet you never made a big issue out of it. Why?
A: Several great politicians have come from common families. People like Lal Bahadaur Shashtri, Morarji Desai were born in very poor families. But, they never hyped about their poverty and extreme conditions for self-promotion. Modi is India’s first PM born after Independence. He is a product of policies adopted by the founders of our nation. They not only ushered economic development, but also ensured that everybody gets equal opportunities to progress.
Q: According to you, what are the biggest failures and biggest achievements of this government?
A: The current regime got a full mandate to usher in a new set of reforms, but it has been an abject failure in doing so. The biggest failure of this government has been in tackling unemployment. It should have devoted its time and energy to implement second generation of economic reforms, but it took foolhardy decisions such as GST and demonetisation. And the net result is that more than 40 million people have lost their jobs.
The rate of unemployment is highest in the last 45 years. Economic growth rate was lowest in the last five years and despite modifying the methodology of GDP calculations, average GDP growth rate is disappointing and dubious. In 2018, the industrial growth rate was 4.45 per cent, while it was 8.35 per cent during the UPA period (2004-14). Agricultural growth rate is 2.9 per cent, while it was 4.2 per cent during the UPA tenure.
Domestic savings are lowest in the last two decades. There is a five-fold increase in non-performing assets (NPA) of banks. New investment is at its lowest level in the last 14 years. The BJP had talked about creating future-oriented institutions, but I am feeling distressed in saying that the Modi government has proved to be the most destructive for government institutions in our 70-year history.
Q: How will the much-touted NYAY scheme impact the economy?
A: It has two main objectives. First is to completely eliminate poverty and second to bring the economy back on track. Due to our policies in the last seven decades, now only about 20 per cent of our people are poor. This is the right opportunity to end the poverty, once and for all, by implementing the NYAY scheme. It will usher in a new era. As far as expenditure on this scheme is concerned, it would be around 1.2 to 1.5 per cent of the GDP. There we will be no need to introduce any new tax.
Q: Just before the elections, a biopic on Modi was released. Previously, a film like The Accidental Prime Minister was released against the Congress? How do you feel about all this?
A: The BJP tried to present such an unrealistic image of our government. Truth is that we pulled 14 million people out of poverty and it’s a record in such a short span. Our legacy includes world-class airports, highways and metros. As far as the films are concerned, we have always maintained full respect for freedom of art and expression. People understand the reality behind all this.
Q: If Congress comes back to power, will you want to be PM again?
A: For 10 years, I tried to give the best of my capacity and capability. I will remain active in public life. But, now it is time for youths to lead. I want to see a progressive, liberal and democratic government led by the Congress.
Q: If the Congress forms the government, what will be its biggest reform?
A: The Congress has promised to implement new and improved GST-2. New GST will be based on a uniform, standard and liberal GST rate for all kinds of products and services. We will abolish the current system based on multiple rates.
Q: In your opinion does the Modi government deserve a second chance?
A: The whole country has witnessed this government’s regular and relentless attempts to diminish and destroy the credibility of constitutional institutions. The ruling powers have tried to weaken them in a planned manner. We will have to counter this attack on constitutional institutions, otherwise history will never forgive us.
Q: If you had a full mandate like the Modi government, how differently would you have run the government?
A: See, despite facing difficulties of running a coalition government, we were successful in providing a strong growth rate. If we had the full majority like the current government, we would have not only aimed for a double digit growth, but would have achieved it too. The BJP government has turned back the clock of reforms. As of now our economy is over regulated. There is excessive government control. Judicial intervention in economic policies is growing too. Congress’s economic philosophy was based on wealth creation via open and liberal market economy.
Q: How would you like to be remembered – as an economist, as the Prime Minister or as a world-class academic?
A: After being out of power for five years, I can say that people of this country still remember the work we had done. History has been kind to us. The UPA government will always be remembered for providing constant and high economic growth rate for a decade. Pulling out 14 million people out of poverty in such a short span will also be our hallmark for a longtime. It was the result of a team effort. I have always tried to do justice to all my roles to the best of my capabilities.
Q: Any work that has been done by Modi government in a better way that you could not do? Again is there anything it could have done but failed to do?
A: The Modi government lost a golden opportunity to quicken the pace of reforms initiated by the previous governments. It could have utilised its full majority to achieve a lot of things. Though this government has initiated some banking reforms, still they are in very early stages.
Q: Do you feel that coalition government is a hindrance to growth?
A: I beg to differ from this assessment. In the past, several coalition governments have achieved higher growth rate as compared to governments with full majority. During the 10 years of UPA rule, the average growth rate was 8.1 per cent. In contrast, the BJP government could not even touch 8 per cent mark in the last five years despite having full majority. During Congress rule, several social welfare schemes such as MNREGA, Food Security Act, Right to Education and Forest Rights Acts could be implemented only because we interacted and consulted a lot of people. In the last five years, such an approach was completely missing.
Financial autonomy of states and federal structure has been undermined to a great extent. This happened because an autocratic central government with full majority was in place. In a coalition government, the decision-making process is subjected to several checks and balances. Due to this, the final decisions are more democratic and carefully undertaken. It is a common feature of the current government that even the Cabinet ministers are unaware about big decisions.
Q: Do you feel that the Modi government failed in providing employment?
A: Modi ji had come to power with a promise to provide 20 million jobs per year but due to his wrong policies 40 million youths have already lost their jobs. Hiding government surveys behind curtains hardly makes any difference. The grim reality is that the current unemployment rate is 6.1 per cent, which is highest in the last 45 years.
Q: Congress has levelled allegations that black money worth billions was converted into white during demonetisation. You are the former RBI governor. Do you think this is possible?
A: The real truth of demonetisation is that this was an intentionally-achieved historical failure. Several public disclosures indicated that demonetisation was a dubious ploy to convert black money into white. On the one hand, more than 120 people lost lives standing in serpentine queues outside banks and on the other hand a parallel black market to convert old notes with newer ones was flourishing right under the government’s nose.
By special arrangement with Dainik Bhaskar.