Modi's $5 trillion dream is wishful thinking says former PM Manmohan Singh

Lashing out at the government for being in denial mode, former Prime Minister Manmohan Singh on Wednesday agreed with a former close aide that the Centre's hopes of turning India into a $5 trillion economy by 2024-25 was "wishful thinking".

Montek Singh Ahluwalia, has "pointed out that contrary to what the ruling group may say, today the $5 trillion economy by 2024-25 is wishful thinking. Also there is no reason to expect that farmers' income will be doubled in a three-year period (as the government has announced)," Singh said after releasing "Backstage - The Story Behind India's High Growth Years" by the former Planning Commission Deputy Chairman.

"Today, we have a government that does not acknowledge a word such as slowdown. This is not good... Unless you conceptualise the problem, you will not find answers," a confident sounding Manmohan Singh, who did not once refer to his notes during his 21-minute address, asserted.

"I think these issues will be debated and should be debated... If you do not recognise the problems that you face, you are not likely to find credible answers to take corrective action. That is the real danger," he said.

Pathways can emerge only through solid dialogue and discussions on the challenges of taking the country forward, he added.

At the same time, he expressed the hope that there will be a debate for carrying forward the economic reforms initiated.

To become a $5 trillion economy "calls for an average growth rate of about 9 per cent in real terms over the six-year period from 2019-20 to 2024-25. With growth below 5 per cent in 2019-20, and only a slow recovery expected next year, achieving an average of 9 per cent for the period as a whole is simply not credible. We will certainly get to $5 trillion, but it will be a few years later," Ahluwalia writes in the book, which has been published by Rupa.

"A more realistic target would be to try to reach a growth rate of around 8 per cent per year as quickly as possible. This is certainly necessary if we want to continue to reduce poverty and generate the employment needed to satisfy our young and aspirational labour force. Is 8 per cent growth feasible? India did achieve GDP growth of 8.5 per cent in the first seven years of the UPA, but a return to that growth rate is easier said than done," Ahluwalia warns.

India's growth was at 6.8 per cent in 2018-19 and dropped to 5 per cent in 2019-20. It is expected to "strongly rebound" to 6-6.5 per cent in 2020-21 the Economic Survey tabled in Parliament on January 31 said.

Still, Manmohan Singh expressed optimism, saying 8 per cent growth was required but this could only happen after drastic changes in the fiscal policy and the tax structure.