Economy

'Hasty' GST to hit growth: Manmohan Singh

'Hasty' GST to hit growth: Manmohan Singh”

"Both will affect the informal sector and the small scale sector. These sectors are today responsible for 40 per cent of GDP".

Dr Singh's statement has come in the backdrop of India's slowest economic growth in last three years. "Ninety per cent of India's employment is in the informal sector", he said. The country recorded 5.7 per cent GDP growth during April-June. "So when 86 per cent of currency is withdrawn from circulation, plus GST, which was put in practice in haste. lot of glitches are now coming up, it was bound to affect GDP growth adversely", he said.

GDP growth has declined steadily for six straight quarters and the Economic Survey-II predicts that the economy may not be able to achieve the targeted growth rate of 7.5% owing to deflationary pressures.

Amid slum in GDP growth, Prime Minister Narendra Modi will interact with finance minister Arun Jaitley and other top officials on Tuesday to take stock of the situation and discuss remedial measures to bolster growth.

This is not the first time when Dr Manmohan Singh criticized the Centre's demonetisation move.

On November 25 a year ago, some two weeks after old 500 and 1,000 rupee notes were junked, Singh had in his Parliament speech termed demonetisation a "monumental mismanagement", "organised loot" and "legalised plunder" which would cause GDP growth to fall by 2 per cent. CAD has started inching up again - 2.4 per cent of GDP in Q1, against 0.6 per cent in the previous quarter. In the aftermath of the GST rollout too, Singh had told a meeting of the Congress Working Committee - the apex decision making body of the principal Opposition party that the economy was "running on just one engine of public spending". "The most worrisome aspect of all this is the impact on job creation". Inflationary pressures, along with reasons for the lacklustre manufacturing growth of 1.2% in July, may also come up for discussion, they said, adding that the meeting may also take stock of spread of monsoon and its impact on agricultural economy.



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