THREAD on my interview with Dr Manmohan Singh who said India was looking at a “deep and prolonged economic slowdown” #Manmohansingh #India #economy 1/16
Dr Singh suggested 3 steps to fix the economy: significant direct cash transfers to protect livelihoods and boost spending power; government-backed credit guarantees for businesses; and cleaning up financial sector through institutional autonomy & processes. #Manmohansingh 2/16
Dr Singh pointed 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. #Manmohansingh 3/16
"I hope the consensus is wrong," he said. #Manmohansingh 3/16
Dr Singh said the 1991 crisis was a domestic one induced by global factors. “But today's economic situation is unprecedented in its ubiquity, scale and depth."
Not even during WW2 had the "whole world shut down in such a synchronised fashion as it is now.” #economy 4/16
Not even during WW2 had the "whole world shut down in such a synchronised fashion as it is now.” #economy 4/16
Dr Singh said India did what other nations were doing, and "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.” #COVID 5/16
"But the government's shock and awe approach to the lockdown has caused tremendous pain to people.” #COVID 5/16
He said the “suddenness of the announcement and the stringency of the lockdown were thoughtless and insensitive”.
"Public health emergencies such as this are best dealt with locally by local administrators and public health officials, with broad guidelines from the Centre.” 6/16
"Public health emergencies such as this are best dealt with locally by local administrators and public health officials, with broad guidelines from the Centre.” 6/16
Dr Singh India must borrow to raise money. “Higher borrowing is inevitable. Even if we have to spend an additional 10% of the GDP to cater to the military, health and economic challenges, it must be done.” #economy 7/16
Dr Singh acknowledged that it would increase India's debt to GDP ratio, but if borrowing "can save lives, borders, restore livelihoods and boost economic growth, then its worth it.” #economy 8/16
Dr Singh said: “We must not be shy of borrowing but we must be prudent on how we use that borrowing. India's track record as a borrower from multilateral institutions is impeccable.”#economy 9/16
Dr Singh is not favour of printing money to fund the deficit. For countries like India other than costs of institutional autonomy of the central bank, unbridled printing of money can have attendant impacts on currency, trade and imported inflation, he said. #economy 10/16
Dr Singh said the current slowdown was caused by a humanitarian crisis. The previous crises were “macroeconomic crises for which there were proven economic tools”. #economy 11/16
“Now we have an economic crisis caused by an epidemic which has induced fear and uncertainty in society, and monetary policy as an economic tool to counter this crisis is proving to be blunt,” Dr Singh said. #economy 12/16
Dr Singh also told me the banking sector needs capital. “But that is not enough. Most importantly, it needs autonomy of processes and institutions. Bankers must feel confident to lend and not be worried about arbitrary witch-hunts.” #economy 13/16
Dr Singh said there’s a clear need to simplify GST, but it is best not to rush into reforming without adequate thought and debate. It is not an opportune time right now when there is so much else that needs to be done in restoring basic normalcy in the #economy.” 14/16
I asked Dr Singh where the jobs are going to come from. “Large number of good quality jobs can be created mainly by the private sector. For that, we need a thriving private sector,” he said. #economy 15/16
And this is my my piece on the highlights of this interview with Dr Manmohan Singh #Manmohansingh #economy 16/16 bbc.com/news/amp/world…
