Economy is not out of the woods yet, says former PM

THIRUVANANTHAPURAM: Reacting to Moody’s’ upgradation of India’s credit rating, former Prime Minister Manmohan Singh on Saturday cautioned the Union government that it should not be lured into believing that the economy was out of the woods.

“I am glad about what Moody’s has done but we must not be lured into a false belief that we are out of the woods,” he said in Kochi on the sidelines of a seminar organised at St Teresa’s College.

Singh said the economy needed strong guidance to move forward at the rate which the government wanted — 8-10%.

He said the country would take at least one more year to recover from the double shock of demonetisation and the hasty implementation of the Goods and Services Tax (GST). The former PM said note ban was not the correct way to curb black money and the better course would be to simplify tax regime, land registration system and other public services.

Singh said demonetisation slowed down the economy from 7.2% in 2015-16 to 6.7% in the first quarter of 2017-18.

“The pride of cash suffered enormously. It triggered a lot distress among farmers, small traders and medium industries,” he said.

“There are some people who still believe that economy will regain its speed. But I believe it will take at least one year to stabilise,” he added.