Precarious economy mirror of worried society, says Manmohan Singh

New Delhi: Former Prime Minister Manmohan Singh on Friday argued that the “fundamental” reason for precarious state of the economy of the country was the “worrying” state of the society.

“A nation’s state of the economy is also a reflection of the state of its society. An economy is a function of the numerous exchanges and social interactions among the people and institutions. Mutual trust and self-confidence are the bedrock of societal transactions that fosters economic growth. Our social fabric of trust and confidence is now torn and ruptured,” he said at a conclave on economy organized by the Samriddha Bharat Foundation. The former Prime Minister asserted that mere changes in economic policy alone will not help revive the economy. “We need to change the current climate in our society from one of fear to one of confidence for our economy to start growing robustly again”.

Recounting his days as a student of economics at Cambridge University in the 50s where he learnt that economic growth and development are shaped by societies, Dr Singh said one cannot separate society from the economy in any nation. “There is a palpable climate of fear in our society today. Many industrialists tell me they live in fear of harassment by government authorities. Bankers are reluctant to make new loans, for fear of retribution. Entrepreneurs are hesitant to put up fresh projects, for fear of failure attributed to ulterior motives.

“Technology start-ups that are an important new engine of economic growth and jobs, seem to live under a shadow of constant surveillance and deep suspicion. Policy makers in government and other institutions are scared to speak the truth or engage in intellectually honest policy discussions. There is profound fear and distrust among our various economic participants,” he said. He said that the cause of the economic crisis was the government’s policy doctrine that seems suspect every industrialist, banker, policy maker, regulator, entrepreneur and citizen.

“This has halted economic development with bankers unable to lend, industrialists unable to invest and policymakers unable to act. The Modi government seems to view everything and everyone through a tainted prism of suspicion and distrust through which, every policy of previous governments was considered of bad intent, every loan sanctioned was undeserving, every new industrial project was crony in nature and so on”.