NEW DELHI: Finance minister Nirmala Sitharaman on Thursday tabled a ‘white paper on the Indian economy’ in the Lok Sabha.
In her interim Budget speech on February 1, the FM had announced that the government would come out with a white paper on the economy outlining the economic mismanagement in the 10 years of UPA rule from 2004-2014.
“The NDA government has overcome the crisis of those years, and the economy has been put firmly on a high sustainable growth path with all-round development … It is now appropriate to look at where we were then till 2014 and where we are now, only for the purpose of drawing lessons from the mismanagement of those years,” Sitharaman said in the document.
Out of the total 90 points in the white paper, 46 points are devoted to pointing out the major failings of the UPA government in regards to the economy. The other points are devoted to how the NDA “resuscitated” the economy from ‘fragile 5’ to third largest.
Here are some key points:
- UPA leadership abandoned the 1991 reforms after coming to power in 2004.
- In its quest to maintain high economic growth by any means after the global financial crisis of 2008, the UPA regime severely undermined the macroeconomic foundations.
- Inflation raged between 2009 and 2014. Over a 5-year period from FY2010 to FY2014, the average annual inflation rate was in double digits. Between FY04 and FY14, average annual inflation was 8.2%.
- Gross Non-Performing Assets ratio in Public Sector banks rose from 7.8% in 2004 to 12.3% in 2013.
- Gross advances by public sector banks were only Rs 6.6 lakh crore in March 2004. In March 2012, it was Rs 39.0 lakh crore.
- In an era where capital flows dominate, India’s external vulnerability shot up because of over-dependence on external commercial borrowings (ECB). During the UPA government’s tenure, ECB rose at a compounded annual growth rate (CAGR) of 21.1% (FY04 to FY14), whereas in the nine years from FY14 to FY23, they have grown at an annual rate of 4.5%.
- Value of currency plunged. From its high to low, against the US dollar between 2011 and 2013, the Indian rupee plunged 36%.
- For 6 consecutive years between FY09 to FY14, the ratio of India’s Gross Fiscal Deficit (GFD) to Gross Domestic Product (GDP) was at least 4.5%.
- Poor policy planning and execution resulted in large unspent funds for many social sector schemes during the UPA years, which in turn crippled the effectiveness of the government’s schemes. Across 14 major social and rural sector ministries, a cumulative of Rs 94,060 crore of budgeted expenditure was left unspent over the period of UPA government (2004-14), which amounted to 6.4% of the cumulative budget estimate during that period. In contrast, under the NDA government (2014-2024), Rs 37,064 crore of the budgeted expenditure, which is less than 1% of the cumulative budget estimate was left unspent.
(With inputs from agencies)
