New Delhi, November 29: Former Prime Minister Dr Manmohan Singh on Friday termed the state of the economy as deeply worrying, while stating that the state of society being even more worrisome is the fundamental reason behind the precarious condition of the economy. GDP Decline: State of Economy Worrisome, Climate of Fear Needs to Go to Revive Growth, Says Manmohan Singh.
"The state of our economy is deeply worrying but today, I will argue how the state of our society is even more worrisome and that is a fundamental reason for the precarious state of our economy," said former Prime Minister Singh while speaking at an event here. The former Prime Minister termed the GDP figures released earlier in the day as unexpectable.
"GDP figures released today are as low as 4.5 per cent. This is clearly unexpectable. Aspiration of our country is to grow at 8-9 per cent per annum," he said. The sharp decline in growth rate from five per cent in Q1 to 4.5 per cent in Q2 is worrisome. Mere changes in economic policies will not help revive the economy," said Dr Singh.
The former Prime Minister stressed that there is a need to change the current climate in our society. "We need to change the current climate in our society from one of fear to one of confidence for our economy to start growing at 8 per cent per annum. The state of the economy is a reflection of the state of its society. Our social fabric of trust and confidence is now torn and ruptured," he said.India's economic growth slowed to 4.5 per cent in the July to September quarter from 7.1 per cent in the corresponding period of last year, the government data showed on Friday.
The economy had a weak performance last quarter with the GDP growth rate dropping to 5 per cent. The slowdown in Q2 FY20 was largely due to a sharp dip in the manufacturing sector and agriculture output said the Ministry of Statistics and Programme Implementation in a statement.
However, Chief Economic Advisor (CEA) KV Subramanian has expressed hope that the country's gross domestic product (GDP) is likely to pick up in the third quarter of the current financial."We are saying again that the fundamentals of the Indian economy continue to be strong. GDP is expected to pick in the quarter three," he said. GDP Growth Rate Sinks Further to 4.5 Percent For Q2 of 2019-20, Fiscal Deficit Crosses Full Year Target.
Department of Economic Affairs (DEA) Secretary Atanu Chakraborty said that equity capital flows have been positive this year.Meanwhile, the eight-core industries recorded 5.8 per cent decline in October from the 5.2 per cent decline seen in September, said the government data.
"The combined index of eight core industries stood at 127 in October 2019 which declined by 5.8 per cent as compared to the index of October 2018. Its cumulative growth during April to October 2019-20 was 0.2 per cent," according to an official statement by the Ministry of Commerce and Industry.
The index of eight core industries comprises coal, crude oil, natural gas, steel, cement, electricity, fertiliser, and refinery products. The index makes up 40.27 per cent of the Index of Industrial Production (IIP).Coal production declined by 17.6 per cent in October versus the de-growth of 20.5 per cent.
The index was also dragged down by electricity which reported a plunge of 12.4 per cent compared to a plunge of 3.7 per cent in September.Crude oil production declined by 5.1 per cent in October 2019 over the same month of last year. Cement production declined by 7.7 per cent but fertiliser production increased by 11.8 per cent. Petroleum refinery production too increased marginally by 0.4 per cent.