With the Budget Session being the last before the Lok Sabha elections, Union Finance Minister Nirmala Sitharaman on Thursday tabled a “White Paper” on the Indian economy to put in stark contrast the economic performance in the 10 years of UPA, rule vis-à-vis a decade under the Narendra Modi-led NDA government. In the 59-page document brought out by the Ministry of Finance, the Centre said, “In 2014 when we formed the government, the economy was in a fragile state; public finances were in a bad shape; there was economic mismanagement and financial indiscipline, and there was widespread corruption. It was a crisis situation.”
'UPA Government failed miserably'
It claimed that “the UPA Government failed miserably to facilitate economic activities” and instead created hurdles that held back the economy”. Stating that “it is necessary to place in the public domain the seemingly insurmountable challenges – left behind as a legacy by the UPA Government”, the document claimed that “every challenge of the pre-2014 era was overcome through our economic management and our governance. These have placed the country on a resolute path of sustained high growth.
This has been possible through our right policies, true intentions, and appropriate decisions.” On the objectives of the White Paper, the document said it seeks to apprise people of the “governance, economic and fiscal crises that were bequeathed on this government”, the “policies and measures” taken to “restore the health of economy”, generate a wider debate on “national interest and fiscal responsibility” and “to commit ourselves to national development”.
'UPA Government inherited a healthy economy'
The document claimed that India declined “from a healthy economy in 2004 to a stagnant economy in 2014”. It added that “the UPA Government inherited a healthy economy ready for more reforms, but made it non-performing in its 10 years” and added that “the UPA leadership, which seldom fails to take credit for the 1991 reforms, abandoned them after coming to power in 2004.”
The White Paper also referred to how “the UPA government, in its quest to maintain high economic growth by any means after the global financial crisis of 2008, severely undermined the macroeconomic foundations” and one of these was “price stability” with the average annual inflation in 2004-14 being 8.2 per cent. During the UPA rule, the Centre said “bad debts in the banking system” rose sharply. The report said the gross advances rose from Rs 6.6 lakh crore in March 2004 to Rs 39 lakh crore in March 2012 and “not all problem loans were recognised”. The period was also one of elevated external vulnerability and foreign exchange crunch.
'Misplaced priorities'
The White Paper also said that “the UPA Government's response to the 2008 Global Financial Crisis – a fiscal stimulus package to combat the spill-over effects - was much worse than the problem it sought to address” as “there was no need for the continuation of the misguided stimulus beyond one year”. It also charged that there were “misplaced priorities and the conspicuous neglect of infrastructure and asset creation” which “caused industrial and economic growth to stumble.”
To cite an example, the paper said while 24,000 km of national highways were added during NDA regime from 1997 to 2002, only 16,000 km were added during the 10 year UPA rule. The government said poor policy planning and execution also left Rs 94,060 crore of budgeted expenditure unspent and this impacted many social sector schemes. The Centre therefore said “the decade of the UPA government was a lost decade” that “choked the growth potential and India became a fragile economy”.
'Pervasive corruption'
The Modi government has also accused the UPA rule of “pervasive corruption” and recalled the cases pertaining to coal block allocation, Commonwealth Games, 2G Telecom, Saradha Chit Fund, INX Media, Embraer deal, Augusta Westland Helicopter Scam and others to highlight the scale of the problem. Detailing on how after taking over in 2014, the Modi government “recognized the urgent need to revamp and overhaul systems and processes, to help India advance on the path of development while also bolstering its macroeconomic foundations”, the document stressed that digital reforms, vaccination drives, diversifying exports and setting up of an expenditure reform commission helped. “We continue to undertake measures to unearth black money and to discourage recourse to it,” it added. Stating that Indian economy is undergoing a transformation and has come from being in “fragile five” to “top five” in a decade, the government said in these years the stagnant financial sector has been “revitalised” and the credit ecosystem has been “overhauled”.
The pace of national highway construction has again picked up and reached 28 km per day in FY23 from a mere 12 km per day in in FY15. It also drew a “then and now” comparison to state how from a 2G scam India now had the fastest rollout of 5G in 2023; how double digit inflation has been replaced with a 5 per cent inflation, and how from a foreign exchange crisis, the country now has over $620 billion in reserves. While listing various other initiatives taken by the Modi government, the document claimed the regime “recognised the need to make tough decisions for the greater economic good”. It concluded saying, “the Amrit kaal (golden period) has just begun and our destination is `India a development nation by 2047’.
