In a rare interview India’s former prime minister Manmohan Singh criticised his successor Narendra Modi’s government for failing to take advantage of lower commodity prices to propel economic growth and an inconsistent policy towards neighbour Pakistan.
Speaking to the India Today, Singh said the Modi government should use India’s improving fiscal balances to raise investment in the economy and raise credit availability to businesses.
“In the hands of a purposeful government, this could be an opportunity to step up investment in the economy in a big way,” said Singh, who left office after a 2014 election loss.
Singh, who is regarded as the architect of India’s economic reforms that led to years of rapid growth, said the government has not been able to capitalise on falling oil and commodity prices that have lowered India’s import bill.
Sharp falls in import prices have reduced India’s trade deficit raising hopes that it will boost economic activity.
India’s turbocharged growth figures have been criticised by many analysts for giving too flattering a view of Asia’s third-largest economy.
Indian economy posted growth of 7.3 percent in the quarter through December, but consumer inflation inched up unexpectedly last month and capital goods production, a proxy for investments, fell nearly 20 percent in December.
Modi’s finance minister Arun Jaitley is expected to present a credible budget on February 29, people involved in the process say, yet the government might break its budget deficit targets to stimulate demand.