Economy is not out of woods despite Moody's rating upgrade, says Manmohan

The NDA government should not be "lured into false belief" that the economy is out of the woods, former prime minister Manmohan Singh said on Saturday, reacting to the Moody's upgradation of India's sovereign credit rating.

The US-based agency upped India's rating to Baa2 from Baa3 and changed its rating outlook to 'stable' from 'positive', saying the reforms will help stabilise rising levels of debt.

"I am glad that Moody's has done what they have done but we must not be, I think, lured into false belief that we are out of the woods," he said, reacting to a query on Moody's rating in Kochi.

 

The economy needed strong purposeful guidance to move forward at the rate that the government itself says they want the country to move eight to 10 per cent, Singh said on the sidelines of a national seminar on 'Macro Economic Developments in India: Policy Perspectives' organised by the Economics Department of St Teresa's College, Ernakulam.

His comments came in the wake of Finance Minister Arun Jaitley terming the Moody's upgrading India's sovereign rating after 13 years as "belated recognition" of reforms undertaken.

Singh also cautioned that the soaring prices of the crude oil could "hurt the fiscal system" of the country.

"Now the crude oil prices are $62-64 whereas a few months ago, they were about 40-45. So it can hurt balance of payment. It can also hurt the fiscal system as well," Singh said.

Asked how different he would have implemented the GST, Singh said there was "undue haste" in implementing the new taxation system and blamed the bureaucracy for its lack of preparedness.

"Both in administration and implementation, I think there is much to be desired and the very fact that the council has met so many times, they have now reduced rates of 211 items."

That showed that there was undue haste in implementation and the bureaucracy had not done its homework, he said.