As promised in her Interim Budget, Finance Minister Nirmala Sitharaman laid a White Paper on the economy in the Lok Sabha on Thursday, outlining that the UPA’s 10 years in office created “an inheritance of loss” for the country and the Narendra Modi-led NDA government “rescued the economy from a state of crisis, despair and paralysis”.
Coming two days before the Seventeenth Lok Sabha is adjourned for the last time, the 47-page paper with a few pages of data annexures, sought to make a case that the present government had rejuvenated the economy from the UPA’s policy stasis and misgovernance to infuse it with “dynamism and growth, and hope in the people”.
The paper attributed the few UPA years of high growth to reforms undertaken by the Atal Bihari Vajpayee-led NDA government, and blamed the Manmohan Singh regime not only for being fiscally profligate and opting for “quick fixes” like farm loan waivers, but also for failing to deliver on reforms such as Aadhaar and the Goods and Services Tax (GST).
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“When the NDA government took over the reins in 2014, the economy was in bad shape, nay, crisis. We faced the hydra-headed challenge of fixing an economy mismanaged for a decade, and restoring its fundamentals to sound health,” the paper noted, listing out improvements in various macro-economic and infrastructure indicators such as inflation, forex reserves and highway building pace.
“Our government refrained from bringing out a White Paper on the poor state of affairs then. That would have given a negative narrative and shaken the confidence of all, including investors,” the paper said. One of the objectives of bringing out this paper now, the Ministry said, was to “generate a wider, more informed debate on the paramountcy of national interest and fiscal responsibility in matters of governance over political expediency”.
“Then, we were among the ‘fragile five’ economies; now, we are among the ‘top five’ economies, making the third highest contribution to global growth every year,” the paper said, stressing that the economic policy focus has been to undo “the damage of the previous decade”.
“Now that we have stabilised the economy and set it on a recovery and growth path, it is necessary to place in the public domain the seemingly insurmountable challenges — left behind as a legacy by the UPA government,” the paper stated.
Foreign exchange crunch
Alleging that the UPA created a foreign exchange crunch that “reeked of a re-run of 1991 when India had to approach the IMF for assistance during a Balance of Payments crisis”, the paper said by the end of September 2013, forex reserves were just enough to finance little over 6 months of imports, down from 17 months at the end of March 2004. As of January 2024, reserves were sufficient for 10.6 months of imports, it said.
While the paper listed out some of the structural reforms undertaken by what it refers to as “our government”, such as the Insolvency and Bankruptcy Code, liberalisation of foreign direct investment (FDI) norms and GST, it makes no mention of the demonetisation of high-value currency notes in 2016 that was aimed at denting corruption and weeding out black money. However, it does state that “We continue to undertake measures to unearth black money and to discourage recourse to it”.
Alleging “pervasive corruption” under UPA’s watch that had “shaken people’s confidence”, the paper shares the “current status” of 15 “high-profile” “scams”, including the ones pertaining to coal block allocation, 2G spectrum, Commonwealth Games, and deals like Aircel-Maxi, Antrix-Devas and INX Media.
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While some of those cases are still “under investigation” such as the “Land for Jobs” case in the Railways and the purchase of Hawk Aircraft, the paper is silent on the current status in the procurement corruption allegations pertaining to Augusta Westland Helicopter and Pilatus Basic Trainer Aircraft.
“When our government assumed office, the economy was on a road to nowhere, exhibiting tell-tale signs of deep distress emanating from multiple ‘wrong turns’ in economic policy,” the Ministry emphasised.
The “disconnect between India’s policy planners and priorities for the country was so stark” that the people gave an “overwhelming mandate” in the 2014 Lok Sabha polls to the NDA to “take charge of the reins, reverse the staggering economic and fiscal muddle that the country was mired in and restore its dynamism and optimism.”
“Our government, unlike its predecessor, invested in the foundations of the economy along with building a sturdy superstructure. Looking back at the last 10 years, we can say with humility and satisfaction that we have successfully overcome the challenges left behind by the previous government. That said, we are not resting on our laurels. There are miles to go and mountains to scale before we sleep,” the paper concluded.