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NEW DELHI — Union Finance Minister Nirmala Sitharaman presented a 59-page 'White Paper' in the Lok Sabha on Thursday, highlighting the economic mismanagement by the erstwhile United Progressive Alliance (UPA) government, and comparing the country’s economic performance between the UPA years and 10 years of the Narendra Modi government.
The 'White Paper' reels out statistics to back the government’s claim of the fragile state of the Indian economy in the UPA years and lists the steps taken by the NDA government to transform the economy into the 5th largest in the world.
“In 2014 when we formed the government, the economy was in a fragile state; public finances were in bad shape; there was economic mismanagement and financial indiscipline, and there was widespread corruption. It was a crisis situation," it stated.
It highlights the double-digit inflation, ailing banking sector, high policy uncertainty marred India’s business climate, dented its image and the people’s confidence about their future, despite the Vajpayee-led NDA government having handed over a healthy and resilient economy with high growth potential in 2004..
The 'White Paper' also discussed the mismanagement and short-sighted handling of the public finances during FY04-FY14. "Numerous scams were bringing colossal revenue losses for the exchequer and fiscal and revenue deficits spiralling out of control. In 2014, our government inherited a deeply damaged economy whose foundations had to be rebuilt to enable self-sustaining long-term economic growth."
It highlights the telecom and coal scams "which have set the country back by 10 years".
The 'White Paper' also points out that India has now become an investment destination for global giants such as Apple and Tesla.
It states that the economy was severely weakened by the UPA government as it could not control inflation which soared to an average annual 8.2 per cent between FY04 and FY14. In contrast the inflation level has been brought down to 5 per cent by the Modi government.
It lists the banking crisis as one of the most important and infamous legacies of the UPA government. The banking crisis in 2014 was massive, and the absolute sum at stake was too large. Gross advances by public sector banks were only INR 6.6 lakh crore in March 2004. In March 2012, it was INR 39.0 lakh crore. Further, not all problem loans were recognised. There was much under the hood. In sharp contrast to this the banking sector has been nursed back to a robust state of health, the paper said.
The government has also explained the rationale behind bringing out the 'White Paper' at the juncture.
"The responsibility to mend the economy step by step and to put the governance systems in order was enormous. 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 need of the hour was to give hope to the people, to attract investments, both domestic and global and to build support for the much-needed reforms. The government believed 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 'White Paper' states.
"Every challenge of the pre-2014 era was overcome through our economic management and our governance. These have placed the country on a resolute path of sustained high growth. This has been possible through our right policies, true intentions, and appropriate decisions," it added.
The 'White Paper' also highlights the mismanagement and short-sighted handling of the public finances during FY04-FY14. "There were numerous scams bringing colossal revenue losses for the exchequer and fiscal and revenue deficits spiralling out of control. In 2014, our government inherited a deeply damaged economy whose foundations had to be rebuilt to enable self-sustaining long-term economic growth," it said.