The Union Ministry of Finance recently released a report called ‘White Paper on the Indian Economy’ which aims to highlight economic issues leading up to the Lok Sabha elections. Although the report is not factually incorrect, it selectively chooses data to showcase the failures of the previous government and the successes of the current government while neglecting the opposite scenarios.
For instance, the report mentions that in 2013, Morgan Stanley assessed India as one of the “fragile five” global economies, which is true. However, it fails to mention that India was not among the “fragile five” during the UPA’s 10-year rule from 2004 to 2014. India saw the fastest period of growth rate between 2004 and 2009, despite the Global Financial Crisis.
Additionally, while the report is correct in stating the policy paralysis during the end of the UPA’s tenure and the mismanagement of the economy, it fails to acknowledge the many contributory factors to the 2013 crisis. These factors include the US Federal Reserve’s decision to stop flushing the market with more money, and the high prices of crude oil.
Moreover, the report fails to credit the UPA’s fast pace of economic growth between 2004 and 2008, which was the fastest India has ever grown, with moderate levels of inflation. Instead, the report credits it to the AB Vajpayee-led coalition.
In contrast, the first term of UPA saw fast growth, low inflation and India’s best fiscal performance. The report fails to recognize this fact and instead credits the NDA government for its success.
Furthermore, India showed resilience during the Global Financial Crisis of 2008, while many other big economies struggled. The report downplays this achievement by quoting a speech by then Finance Minister Pranab Mukherjee, without acknowledging that India was not completely immune to the crisis.
Lastly, while the NDA government has made genuine achievements, such as the implementation of GST and IBC, and the clean-up of commercial bank balance sheets, there has been much greater employment-related stress. Despite a decrease in the unemployment rate, new jobs are of poor quality and wages have remained stagnant for long periods. Additionally, inflation has stayed uncomfortably high, failing to reach the suggested level under the monetary policy framework for the past four years.