Former prime minister Manmohan Singh (centre) during a press conference in Mumbai. (Photo Credit: Twitter/@INCIndia)
Former prime minister Manmohan Singh on Thursday hit back at Finance Minister Nirmala Sitharaman, who had blamed him for the crisis in the banking sector, saying that the BJP government at Centre is obsessed with trying to fix blame on the opponents instead of finding solutions. Addressing a press conference in Mumbai in the run-up to the Maharashtra Assembly elections, Singh said, "I have just seen the statements by Finance Minister Nirmala Sitharaman. I won't like to comment on that statement, but before one can fix the economy, one needs a correct diagnosis of its ailments and their causes. The government is obsessed with trying to fix blame on its opponent, thus it is unable to find a solution that will ensure revival of economy."
The remarks from the former prime minister came a day after Sitharaman, at an event in US, held him and former RBI governor Raghuram Rajan responsible for the “worst phase” of public sector banks (PSBs).
"I have no reason to doubt that Rajan feels for every word of what he is saying. And I'm here today, giving him his due respect, but also placing the fact before you that Indian public sector banks did not have a worst phase than when the combination of Singh and Rajan, as Prime Minister and the Governor of the Reserve Bank of India (RBI), had. At that time, none of us knew about it," the Finance Minister had said.
The debate over the health of PSU banks was triggered once again after a scam hit the Punjab and Maharashtra Co-operative (PMC) Bank. The RBI last month imposed operational restrictions on Punjab and Maharashtra Co-operative Bank (PMC Bank) and capped withdrawals at Rs 1,000 per account due to massive under-reporting of dud loans. However, after massive protests by the depositors and the pressure from the Opposition parties, the central bank had raised the withdrawal limit to 40,000 in a phased manner.
Bad loans of the public sector banks (PSBs) have risen many folds in the last 7 years. The PSBs reportedly had Rs 9,190 crore in bad loans in 2011-2012. The number, however, rose to Rs 2.16 lakh crore in 2013-2014. In the 2018-19 fiscal, the total bad loans of commercial banks stood at Rs 9.34 lakh crore.
No Hope Of Economy Reaching The USD 5 Trillion By 2024
"I've said this publicly before that to reach a goal of $5 Tn by 2024,as against $2.7 Tn that we had in 2018,would require a growth rate of 10-12% pa. What's happening in BJP regime is that govt is faced with prospect of a declining rate of growth year after year," Singh said.
Citing IMF's recent growth forecast for India, Singh said that there's no hope of the economy achieving the target of USD 5 trillion by 2024. "IMF has come with statement that India's growth rate durin current fiscal year will be only 6.1% as against 7.3% mentioned some months ago. With growth rate declining yr after yr I don't think there's any hope of economy reaching the target of $5 Trillion by 2024," he added.