Former prime minister Manmohan Singh on Sunday said that state of the economy is deeply worrying and all-round mismanagement by Modi govt has resulted in this slowdown. “The state of the economy today is deeply worrying. Last quarter's GDP growth rate of 5 per cent signals that were in the midst of a prolonged slowdown. India has the potential to grow at a much faster rate but all-round mismanagement by Modi government has resulted in this slowdown,” he said
He slammed the Centre for hastily implementing Goods and Services Tax (Tax) and urged the government to put aside vendetta politics and ‘reach out to all sane voices to steer the economy out of this man-made crisis’.
“It is particularly distressing that the manufacturing sector's growth is tottering at 0.6 per cent. This makes it very clear that our economy has not yet recovered from the man-made blunders of demonetisation and a hastily implemented GST,” he said in a statement.
"Investor sentiments are in doldrums. These are not the foundations for economic recovery," he added.
Meanwhile, the government has announced a raft of measures, including rollback of enhanced super-rich tax on foreign and domestic equity investors, exemption of startups from 'angel tax', a package to address distress in the auto sector and upfront infusion of Rs 70,000 crore to public sector banks, in efforts to boost economic growth from a five-year low.
To bolster consumption, the government also said that banks have decided to cut interest rates, a move that would lead to lower EMIs for home, auto and other loans.
Finance Minister Nirmala Sitharaman, who had been flooded with demands from different sectors after her maiden Budget this year did little to address their distress, promised to continue the reforms and announce more measures next week.
While the applicability of higher income tax surcharge on those earning more than Rs 2 crore a year has been withdrawn for foreign and domestic equity market investors, demand for auto sector was sought to be raised by slew of measures. The steps include a plan to encourage scrapping of old vehicles and removal of ban on government departments in buying new petrol/ diesel vehicles.
In a bid to give fillip to job-creating Micro, Small and Medium Enterprises (MSME), Sitharaman said pending GST refunds would be done within 30 days, while startups - a major avenue for employment and new entrepreneurship - would be exempt from so-called 'angel tax'.
With PTI Inputs