With the national elections drawing closer, the debate over the performance of the Indian economy has moved centerstage. Last week, Finance Minister Nirmala Sitharaman tabled a white paper in Parliament that compares how the Indian economy has fared under the BJP government (2014-15 to 2023-24) and the Congress-led UPA government (2004-05 to 2013-14). The tone of the document is overtly political — it’s an attempt to show how the economy was mismanaged by the UPA government. The white paper begins by saying that in 2014 the Indian economy was in a “fragile state”, public finances were in “bad shape”, and there was “widespread corruption”. It then credits the BJP government for turning around the country’s economic prospects after coming to power, and setting the economy on a “recovery and growth path”.
Some of the criticism levied against the UPA government is fair. Inflation had surged during the UPA’s term, banks were saddled with bad loans because of reckless lending, there was a high degree of policy uncertainty, the issue of retrospective taxation had dealt a blow to the country’s image as an investment destination, and numerous scams and corruption cases had come to light. At the same time, it is also true that the Indian economy grew at its fastest pace during the UPA government. The UPA government ushered in the MGNREGA and the NFSA which form the backbone of the country’s social security architecture today. On its part, the BJP government has ushered in far-reaching economic reforms such as IBC and GST. It has also utilised the JAM platform (Jan Dhan, Aadhaar and Mobile) to deliver goods and services more efficiently, leading to less leakages from the system. It has undertaken measures to increase the pace of formalisation. In recent years, it has also stepped up the budgetary allocation for capital expenditure. A greater share of the government’s borrowings is now being used to finance capital expenditure.
Even as it seems one-sided in its assessments, the white paper is also silent on several arguably contentious but critical issues facing the country. Take, for instance, the issue of jobs. Under both UPA and BJP governments, the Indian economy has been unable to adequately generate more productive employment opportunities for the millions entering the labour force and those looking to move out of agriculture — but jobs and unemployment find little mention in the report. Nor do the trends in poverty as conventionally measured through the consumption expenditure surveys. The issue of subdued wages also seems to have been side-stepped. At this critical juncture in India’s growth trajectory, the ruling party needs to break free of the game of one-upmanship and use its platform and opportunity to present a detailed and thought-through roadmap for India. That will be necessary to meet the goal of making the country a developed economy by 2047.
