Dr Manmohan Singh during a media interaction in Mumbai on Thursday, the economic capital of the country said: "…before one can fix the economy, one needs a correct diagnosis of its ailments and their causes." There were some weaknesses, but the government can't claim that the fault always lies with the Congress-lead United Progressive Alliance (UPA) government, said the former Prime Minister who served two terms from 2004 to 2014.
"You have been in office for five years. Mainly passing the buck to UPA is not enough," said Dr Singh, himself a renowned economist.
Federal Finance Minister Nirmala Sitharaman said at an event in the US on Tuesday 15 October that she holds the Dr Manmohan Singh-Raghuram Rajan (former Chairman of the Reserve Bank of India) combination responsible for subjecting public sector banks to their "worst-phase".
Indian banks – both state-funded and private have been plagued by non-performing assets (NPA) or bad loans, especially after stress on the economy. The state-run banks alone have lost Rs. 1, 07,423 lakh crore (approximately $ 1.5 billion) in bad debts via the 88 biggest defaulters in the country, according to a report.
The government has come out with several policy initiatives to firefight criticism over the recession in the economy from banking to housing and industrial slowdown.
The International Monetary Fund (IMF) has lowered its projections for the growth rate to 6.1 per cent, for the second time in seven months.
The IMF said, the negative impact on growth comes from financial vulnerabilities and the non-banking financial sector and its impact on consumer borrowing by small and medium enterprises. IMF Chief Economist Gita Gopinath warned on Wednesday 16 October, though the government has taken some measures, more needs to be done if India's growth is to recover and touch 7 per cent.
"There is a lot more to be done, including cleaning up the balance sheets of regular commercial banks. In our projections, we have said that India will recover to 7 per cent growth in 2020 on the premise that these particular bottlenecks will be cleared up," she added.