Manmohan Singh suggests a 3-step procedure for reviving the economy

Recently, the former Prime Minister of India, Manmohan Singh had an interaction with BBC where he revealed his ideas on the economic crisis and how the coronavirus pandemic was mishandled in the country.

He agreed that the coronavirus pandemic is a humanitarian crisis and not just a crisis stuck to India but he also pointed out the approach that the center took has caused a lot of pain in the poor. “Perhaps a lockdown at that stage was an inevitable choice. The suddenness of the announcement and the stringency of the lockdown were thoughtless and insensitive,” Manmohan Singh said.

He further explained that even if the current economic slowdown or the crisis was inevitable, there is a chance of recovery provided a three-step procedure is followed.

While highlighting the concerns regarding the current situation, he said that the first that the government should follow is providing direct cash assistance to keep the poor population going. “Ensure people’s livelihoods are protected and they have spending power through significant direct cash assistance.”

Second would be that the government should make use of “government-backed credit guarantee programs” to make capital available for business. And the last one is that ‘institutional autonomy’ should be the way to go to the center to keep in check of the process involved.

Coming to his first point, direct cash assistance, he said that this will surely increase the debt, there will be heavy borrowing on India’s side but if that can bring back the economy, support the needy, give them livelihood then why not choose this. “We must not be shy of borrowing but we must be prudent on how we use that borrowing,” the BBC quoted Singh as saying. Former Finance Minister of the country said that even before COVID happened, India’s economy was struggling with a show pace GDP of 4.2, slowest in a decade. Experts have termed this as an economic contraction in nominal terms which happened for the first time since Independence. Singh hoped that the consensus does not stand true. 

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