Former Prime Minister and eminent economist Manmohan Singh cautioned the ruling NDA regime over reading too much into the Moody’s upgradation of India’s sovereign ratings. He said the government should not be “lured into false belief” that the economy is out of the wood.
The US-based agency upped India’s rating to Baa2 from Baa3 and changed its rating outlook to ‘stable’ from ‘positive’, saying the reforms will help stabilise rising levels of debt.
“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 wood,” Manmohan Singh said on Saturday.
The ratings released late on Thursday had given major boost to the Modi government, currently battling political criticism over the GST and last year’s note ban move.
The opposition parties, especially the Congress, have been claiming that those two move has hit the economy hard. BJP senior leader Yashwant Sinha too had voiced sharp views against the government led by his party. Sinha was Finance minister in previous BJP government led by Atal Bihari Vajpayee.
Speaking on the sidelines of a national seminar on ‘Macro Economic Developments in India: Policy Perspectives’ organised by the Economics Department of St Teresa’s College, Ernakulam, Dr. Singh said that economy needed strong purposeful guidance to move forward at the rate which the government itself says they want the country to move eight to 10 per cent.
The former Prime Minister also cautioned that the soaring prices of the crude oil could “hurt the fiscal system” of the country.
“Now the crude oil prices are USD 62-64 whereas few months ago, they were about 40-45. So it can hurt balance of payment. It can also hurt the fiscal system as well,” Singh said.
Manmohan also claimed that there was an “undue haste” in implementing the new taxation system (GST) and blamed the bureaucracy for its lack of preparedness.
“Both in administration and implementation, I think there is much to be desired and the very fact that the council has met so many times, they have now reduced rates of 211 items,” he said.
(With inputs from PTI)