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.
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