Economic slowdown is certain, government needs to increase spending: Manmohan Singh

Former Prime Minister Manmohan Singh expresses concern over the current situation and asserts that an economic slowdown in the country is certain.

Former Prime Minister Manmohan Singh has advised that that in order to tackle economic crisis triggered by Coronavirus pandemic, the government needs to increase its spending.

Followed by advice, Singh offered an action plan through a recent email interaction with the BBC and urged the government to follow it to tackle the humanitarian crisis triggered by the Coronavirus pandemic.

According to Him the government need to spend more to protect livelihoods and provide credit guarantee to business besides paving way for institutional autonomy to reduce the current economic distress.

Manmohan Singh, who is the man behind bringing liberalization in Indian economy in 1991, said a “deep and prolonged economic slowdown” is sure to come and the government should see this distress triggered by pandemic from the “prism of society rather than economic numbers”.

He further added that the government has to make tough choices as on the liquidity, lending and fiscal responsibility front the higher borrowings are inevitable specially in difficult times like this.

“Even if we have to spend an additional 10% of the GDP (Gross Domestic Product) to cater to the military, Health and economic challanges, it must be done,” he told BBC. According to him additional borrowings can save lives, borders restore livelihoods and even boost economic growth, which has been stalled since lockdown was imposed at the end of the March.

Singh’s advice the government at the time when the Indian economy is going through a major economic crisis, due to lack of demand and falling employment, the economy is expected to contract sharply in the current fiscal.

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