Economy, society in a worrisome state, small changes not enough : Manmohan Singh

Speaking at the national economic conclave at the Jawahar Bhawan here, Dr Singh said that there was a sense of fear in the society that needs to be changed into confidence for the  economy which needs to grow at a higher rate of about eight per cent, he said with reference to the GDP figures being recorded at 4.5 per cent for the second quarter.

''This decline in the GDP is some thing to worry about,'' Dr Singh said and added that small changes in the economic policies will not be enough to revive the economy.

The noted economist turned politician said: "There is no one today who can deny the sharp slowdown in India’s economy and its disastrous consequences, particularly for farmers, youth and the poor. But it is my belief that mere changes in economic policy alone will not help revive the economy. We need to change the current climate in our society from one of fear to one of confidence for our economy to start growing robustly again."

Urging that politics be kept out of the discussion, he said there was a palpable climate of fear in society today. Many industrialists told him that they live in fear of harassment by government authorities. Bankers were reluctant to make new loans, for fear of retribution.

Entrepreneurs were hesitant to put up fresh projects, for fear of failure attributed to ulterior motives. Technology start-ups that were an important new engine of economic growth and jobs, lived under a shadow of constant surveillance and deep suspicion.

Similarly, policy makers in government and other institutions were scared to speak the truth or engage in intellectually honest policy discussions as a profound fear and distrust existed among various economic participants.

Blaming this climate of fear on erosion of public trust in independent institutions such as the media, judiciary, regulatory authorities and investigative agencies, he said "this toxic combination of deep distrust, pervasive fear and a sense of hopelessness in our society is stifling economic activity and hence economic growth."

Holding the government’s policy doctrine of suspecting every industrialist, banker, policy maker, regulator, entrepreneur and citizen responsible for the slowdown, he said this has halted economic development with bankers unable to lend, industrialists unable toinvest band policymakers unable to act."

"The government has positioned itself as some saviour, resorting to foolhardy moral-policing policies such as demonetisation, that have proved to be disastrous. For economic growth to revive, it is very important that the government enthuses trust and confidence," he added.