MUMBAI: Former Indian prime minister Manmohan Singh criticised his successor Narendra Modi’s government in a rare interview, saying it has failed to capitalise on lower commodity prices to propel growth and is inconsistent in its policy towards Pakistan.

Speaking to the India Today magazine, he said Mr Modi should focus on improving relations with neighbouring countries, adding that the government had not succeeded in making headway with Pakistan.

“Certainly relations with major powers have improved... But I would say that the real test of foreign policy is in the handling of your neighbours. And here I would say that the Modi government’s handling of Pakistan is inconsistent,” he told the magazine.

“It has been one step forward, two steps back.”

He said the Modi government should use improving fiscal balances to raise investment in the economy and increase the availability of credit 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 Mr Singh, who left the office in 2014.

Regarded as the architect of economic reforms that led to years of rapid growth, Mr Singh said the government had not been able to take advantage of falling oil and commodity prices that had lowered India’s import bill.

Sharp falls in import prices have reduced the trade deficit, raising hopes that it will boost economic activity. But “turbo-charged” growth figures have been criticised by many analysts for giving too flattering a view.

The economy expanded 7.3 per cent in the quarter through December, but consumer inflation inched up unexpectedly last month and capital goods production, a proxy for investments, fell nearly 20 per cent in December.

Finance Minister Arun Jaitley wants to present a credible budget on Feb 29, people involved in the process say, but the government may end up breaking its budget deficit targets to stimulate demand.

In a rebuttal on his website and social media accounts, Mr Jaitley blamed Mr Singh’s administration for mismanaging the economy, adding that the opposition Congress has been unwilling to support reforms in parliament.

“Both the parliamentary affairs minister and myself have discussed the GST with every senior Congress leader in parliament,” he said, responding to Mr Singh’s criticism that the government had not consulted the opposition.

The proposed goods and services (GST) tax, India’s biggest revenue shake-up since independence, has been stuck in the upper house where it needs support from Congress to make it a law.

Published in Dawn, February 14th, 2016



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