Money & Banking

Govt has failed to ‘strengthen’ the banking system: Manmohan Singh

Mumbai | Updated on October 17, 2019 Published on October 17, 2019

Former PM says it may not be possible to create a $5-trillion economy by 2024

Former Prime Minister Manmohan Singh, on Thursday, said the BJP-led NDA government is obsessed with fixing blame on the Opposition and that it has been unable to find solutions to revive the economy and strengthen the banking system despite being in office for five-and-a-half years.

Speaking a day after Finance Minister Nirmala Sitharaman said that Indian public sector banks had the worst phase under Singh and then Reserve Bank of India Governor Raghuram Rajan, the former PM said: . “I would not like to comment on that statement, but I can say that before one can fix the economy, one needs a correct diagnosis of its ailments and causes. The government is obsessed with trying to somehow fix blame on its opponents,” he said, adding that the government has been unable to find solutions.

Singh was in Mumbai ahead of the Maharashtra State Assembly elections, and addressed a session on ‘Words of Wisdom on Indian Economy’ by the State Congress.

Responding to another question, Singh said there were “weaknesses” when he was the Prime Minister and there was a Congress Finance Minister. “But this government has been in office for five-and-a-half years. They should have learnt from our mistakes and provided credible solutions,” he said, while mentioning issues like the fraud by by Nirav Modi and challenges of bad loans.

“They can’t keep claiming the fault lies with the UPA...this may score some debating points, but are not solving solutions,” he said.

PMC Bank issue

Singh, who also interacted with the depositors of fraud-hit Punjab and Maharasthra Cooperative Bank, said it has been an unfortunate incident and hoped that the RBI, the Centre and the Government of Maharashtra would work to help the 16 lakh affected people.

He also hoped the issue would be taken up by Parliament when it meets for the winter session from the middle of November.

“I am hopeful some concrete measures can be taken to secure justice,” he said, adding that the PM’s National Relief Fund should be utilised to help kidney patients who are customers of PMC Bank.

Economic management

The former PM also took on the government over the economy, and said it is interested more in headline management and not in concrete solutions. Commenting on the objective of a $5-trillion economy by 2024, Singh said it would require a growth rate of 10 per cent to 12 per cent per annum.

“Under the BJP regime, the government is faced with declining rate of growth year after year...I don’t think there is any hope of the economy reaching $5 trillion,” he said.

He further said this is true for all goals of the government such as doubling farmers’ income and creating two crore jobs.

Singh said he supports measures to lower corporate taxes, but the problem is shortage of demand. A better route would have been to lower indirect tax to provide relief to the poor, he noted.

He also blamed the government for deterioration in the economy and said that Mumbai and Maharashtra have faced the worst effects of the grave economic slowdown.

Published on October 17, 2019
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