Former prime minister Manmohan Singh said it was "too early to conclude" that the economic slowdown is over and the economy has been revived as the September-quarter gross domestic product (GDP) improved to 6.3 percent.
Singh welcomed the improvement in the growth rate, but explained that this figure did not take into account the small and medium enterprises sector, which suffered the most from demonetisation and hurried implementation of GST.
"(It) is too early to conclude that this represents a reversal of the declining trend observed in the previous five quarters. Some economists believe that the CSO which released the figures has not adequately captured the impact of demonetisation and GST on the informal sector that accounts for about 30 per cent of the economy," Singh said while addressing professionals and businessmen in election-bound Gujarat.
The two-time prime minister strongly criticised the BJP government's economic policies. Speaking on demonetisation, he had earlier said: "Nowhere in the world has any nation taken such a drastic step that swept away 86 percent of its currency. I repeat what I said in Parliament earlier, this was organised loot and legalised plunder."
He had also said the impact of demonetisation on the weaker sections of the society and business was far more damaging than any economic indicator can reveal.
Maintaining the same stance, he said on Saturday: "This (GDP figure) doesn't take into account the small and medium sector which suffered the most after demonetisation and the launch of GST. A couple of big worries remain. Farm sector growth fell to 1.7 percent from 2.3 percent in the previous quarter and 4.1 percent in the same quarter last year."
After the Central government declared Rs 500 and Rs 1,000 notes — which made up 86 percent of the currency in circulation at the point of time — illegal on November 8 last year, GDP growth fell to a three-year low of 5.7 percent.
"We saw the impact of demonetisation on the economy when the GDP growth dropped to 5.7 percent in the first quarter of 2017-18 under the new calculations. Even this is bound to be a gross underestimate as the pain of the informal sector is not adequately captured in the GDP calculation," Singh stated.
Taking a dig at Prime Minister Narendra Modi, he asked if Modi claimed to understand Gujarat and the poor "more than anybody else," how was it then that "he never understood the pain his decisions unleashed"?
Criticising the BJP government's hasty implementation of GST implementation, with poor preparation and complex rate structure, Singh said GST "broke the back of businesses" in India.