NDA WHITE PAPER

PART 1: The Economy in 2014 - An Inheritance of Loss

ONLY EXCERPTS LISTED BELOW

SARASIJ MAJUMDER

The White paper tabled in the Parliament by NDA is a 59-page document, having several chapters. I share with you to day the Headlines, of all the clauses with number, under “POOR ECONOMIC INHERITANCE” by NDA from “UPA”. I will share all subsequently.

 

1. The UPA Government inherited a healthy economy ready for more reforms, but made it non-performing in its ten years.

2. Ironically, the UPA leadership, which seldom fails to take credit for the 1991 reforms, abandoned them after coming to power in 2004

3. Worse, 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.

4. One such foundation that was severely weakened by the UPA government was price stability.

5. The banking crisis was one of the most important and infamous legacies of the UPA government.

6. The banking crisis in 2014 was massive, and the absolute sum at stake was too large.

7. In an era where capital flows dominate, India’s external vulnerability shot up because of over-dependence on external commercial borrowings (ECB).

8. The famous Foreign Currency Non-Resident (FCNR(B)) deposit window for NRIs was actually a call for help when there was a large depletion of the foreign exchange reserves.

9. The costly solution to the above self-created predicament reeked of a re-run of 1991 when India had to approach the IMF for assistance during a Balance of Payments crisis.

10. 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.

11. Under the UPA government, public finances were brought to a perilous state.

12. Run-away fiscal deficits led the economy to the fiscal precipice.

13. If what we saw as concerning, what we could not see was more troublesome

As a result of its fiscal mismanagement, the UPA government's fiscal deficit ended up being far higher than it had expected, and it subsequently ended up borrowing 27 per cent more from the market than what it had budgeted for in 2011-12

15. The fiscal deficit burden became too big to bear, for the economy.

16. In the pretext of responding to the impact of the global financial and economic crisis (while arguing, at the same time, that India was not affected by the crisis), the UPA government expanded its borrowing and did not relent at all.

17. Not only did the UPA Government borrow heavily from the market, but the funds raised were applied unproductively.

18. The conspicuous neglect of infrastructure creation and challenges of the logistical constraints caused industrial and economic growth to stumble.

19. The Reserve Bank's reports also pointed towards excessive revenue expenditure by the UPA government.

20. Poor policy planning and execution also resulted in large unspent funds for many social sector schemes during the UPA years,

21. Health expenditure remained a pain point for Indian households under the UPA government.

22. The government's prioritisation of unproductive spending meant that significant funds were allocated towards consumption rather than productive investment

23. Such was the lack of consideration for long-term national development that even the critical issue of defence preparedness was hampered by policy paralysis.

24. Ban on industrial development in coastal districts. Development on 86 Coastal districts were banned.

25. The UPA government's decade of governance (or its absence) was marked by policy misadventures and scams

26. The coal scam shook the conscience of the nation in 2014.

27. The UPA government will always be remembered for the largest power outage in our history, in July 2012, leaving 62 crore people in darkness and putting national security at risk.

28. The electricity shortages under the UPA government were also repeatedly pointed out by international agencies.

29. India's telecom sector lost a precious decade due to the 2G scam and policy paralysis

30. The 80:20 gold export-import scheme launched by the UPA government exemplifies how government systems and procedures were subverted to serve particular interests for obtaining illegitimate pecuniary gains.

31. The UPA government's term was replete with examples of decision stasis. The Cabinet Secretary noted in 2013, "many large projects both in the public sector as well as the private sector, especially in infrastructure and manufacturing sectors, have been held up for investment on account of delays in obtaining various approvals/ clearances".

32. The UPA government capitalised on the reforms brought in by the previous government but fell short of delivering on crucial reforms promised by them

33. Aadhar in India, a symbol of digital empowerment, too has suffered at the hands of UPA.

34. In the UPA government, decision-making came to a standstill due to corruption and scandals in defence , compromising defence preparedness.

35. A large number of development programmes and projects were implemented poorly as brought out in several performance audit reports of the Comptroller and Auditor General

36. The economic affairs were in dire straits, which was not lost on public commentators. According to an economic observer, "People are justly worried about the downtrend recorded by virtually every economic indicator: exports, industrial production, the rupee, the stock market index, economic growth itself. The only things that seem to be going up are inflation, the trade gap and the fiscal deficit. There is also reason to worry about whether the government is up to the challenge or even reading the situation correctly."

37. While investors across the world sought ease of doing business, the UPA government provided policy uncertainty and hostility.

38. The demotivating investment climate under the UPA government led to domestic investors moving abroad.

39. The decade of the UPA government was a lost decade because it failed to capitalise on the strong foundational economy and pace of reforms left behind by the Vajpayee government. The potential of compounding growth never happened.

40. It was a lost decade as the UPA government failed to gasp opportunities for technology led innovation, efficiency and growth

41. Time and again, there was a crisis of leadership in the UPA government.

42. The Economic Survey of 2012-13 noted, "While India's recent slowdown is partly rooted in external causes, domestic causes are also important. The strong post-financial-crisis stimulus led to stronger growth in 2009-10 and 2010-11.

43. The UPA government's economic and fiscal mismanagement had ultimately hollowed the growth potential of India by the end of its term.

44. The economic mismanagement choked the growth potential and India became a "fragile" economy.

45. Ultimately, what the UPA Government bequeathed in 2014 was an unenviable legacy of a structurally weaker economy and a pervasive atmosphere of despondency.

The above are supported by many Charts, Tables, and Graphs, which couldn't be reproduced here. I have only taken the key statements, and compiled.

 

Reference:--

WHITE PAPER SUBMITTED BY NDA: Part-I,  covered  Page 1 to 22 of total 59 pages.