Former Prime Minister Manmohan Singh on Saturday said that the country should not think it is “out of the woods” after India’s credit rating upgrade, PTI reported. Moody’s Investors Services upgraded India’s local and foreign currency issuer ratings to Baa2 from Baa3 and changed the outlook on the rating to stable from positive.
“I am glad that Moody’s has done what they have done but we must not be, I think, lured into false belief that we are out of the woods,” Singh told students of St Teresa’s College in Kerala’s Ernakulam district. He was in the state to deliver a lecture on “Macroeconomic Developments in India: Policy Perspectives”.
Singh also warned that the soaring prices of crude oil could “hurt the fiscal system” of the country. “Now the crude oil prices are $62-$64, whereas a few months ago, they were about $40-$45 [a barrel]. So it can hurt [the] balance of payments.”
There was “undue haste” in implementing the Goods and Services Tax regime, Singh said, while blaming the bureaucracy for its lack of preparedness. “Both in administration and implementation, I think there is much to be desired.” The fact that the council has met so many times and reduced rates of 211 items shows that the “bureaucracy had not done its homework”, he said.
The former prime minister also said that the country’s economy would take at least a year to recover from the double shock of demonetisation and the Goods and Services Tax regime, according to The New Indian Express. “There are people who believe that the economy will return to normal speed soon...But, I believe the [Indian] economy will remain in the doldrums for next one year,” Singh was quoted as saying.
He told the students that though he does not have readymade answers to tackle black money in the country, demonetisation was not the appropriate response. Simplifying taxes, the land registration system and administration would be a better solution to counter black money, Singh said.
“Demonetisation has led to a lot of distress to our farmers, small traders, and small and medium industries...The pride of cash suffered enormously,” the former prime minister added.
Singh has been a strong critic of demonetisation since it was implemented, and has called it an organised loot. In an interview earlier in November, he had said the time for politicking over demonetisation had ended.