UPA grossly mismanaged economy: FM
New Delhi: In the last session of Parliament before the Lok Sabha polls, the Centre, in a bid to counter the Opposition’s attack on the Modi government’s fiscal policy, on Thursday tabled a white paper tearing into the Congress-led UPA rule for leaving behind India's economy in crisis. The release of the white paper comes at a time when the BJP-led NDA government is seeking a third consecutive term at the Centre in the impending general election. Earlier in the day, the Congress released a “black paper” flaying the Modi regime for “economic disaster”.
Tabling a white paper on the Indian economy in the Lok Sabha, Union finance minister Nirmala Sitharaman accused the former UPA government of “gross economic mismanagement”. She claimed that the Prime Minister Narendra Modi-led NDA government at the Centre has overcome the crisis of those 10 years -- from 2004 to 2014 -- and the economy has been put firmly on a high sustainable growth path with all-round development in the country.
The white paper is aimed at highlighting the ‘alleged economic mismanagement’ from 2004 to 2014 under the Congress-led UPA government.
In her interim Budget speech, Ms Sitharaman announced that the government will come out with a white paper on the economy outlining the economic mismanagement under the UPA rule from 2004 till 2014.
“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. The government will lay a white paper on the table of the House,” she had said on February 1.
The 47-page white paper, with a few additional pages of data annexure, is spliced into three parts, stating: “It is to inform about the policies and measures taken by the government under Modi to “restore the health of the economy and make it vigorous and capable of fulfilling the growth aspirations of the people in the present and in the Amrit Kaal.”
The white paper also discusses the macroeconomic situation of India under the UPA government, focusing mostly on corruption, investment, MSMEs, and the banking sector, among others. Besides, it also highlights the then-double-digit inflation, ailing banking sector following excessive lending during the boom phase, and high policy uncertainty that marred India’s business climate, dented its image and dented the people’s confidence about their future.
The paper mostly highlights the banking crisis in 2014, which was massive and the absolute sum at stake was too large. “The result was a ‘mountain of bad loans’, a high fiscal deficit despite 'much of it being hidden’, a high current account deficit, ‘double-digit inflation for five years’ which hit the pockets of many Indians and membership in the club of 'Fragile Five economies’ in 2013,” the document states.
Fragile Five was the term used for India, along with Turkey, Brazil, South Africa and Indonesia, by investment bank Morgan Stanley for allegedly being too reliant on foreign investment to fuel their growth ambitions.
“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,” it notes.
The paper states that the government chose not to reveal the shortcomings of the UPA earlier, as it would have further "shaken investors' confidence".
“In 2014, when we formed the government, the economy was in a fragile state. 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,” it says.
The paper claims that the economic policies of the UPA government drove investors away from the country. “The coalition government ‘not only failed to impart dynamism’ into the economy but also ‘robbed the economy’ of it such that our industrialists went on record stating that they will ‘rather invest abroad than in India. To drive investors away is easy, but to win them back is hard. The UPA government also demonstrated that it is easier to hurt the economy than it is to help it. They inherited a healthy economy and bequeathed an enfeebled one to us. We have restored its vitality,” it notes.
The need of the hour was to attract investments, both domestic and global and to build support for the much-needed reforms, the paper claims, adding that the Modi government believes in "nation-first" and not in scoring political points.
“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 says.