Growth during UPA years was good but slowdown towards the end was at least in part due to corruption, policy paralysis
India, towards the end of the first decade of the 2000s, was growing at a tremendously fast clip that was evident everywhere you went. And now, there are numbers to back it up. Revised figures apparently from the Ministry of Statistics and Programme Implementation committee headed by Economist Sudipto Mundle, has shown that growth in 2006-07 actually exceeded 10 per cent (10.08 per cent to be precise) instead of 9.57 per cent using earlier base year calculations. But nobody really doubted those numbers, to begin with. The new calculations were never going to make growth in the early UPA years trend downwards in the first place, no matter how some people might package it. And even though the foundations for that growth was laid by the policies and infrastructure projects started by the recently departed Atal Bihari Vajpayee Government, the UPA, in its initial years before the massive and badly implemented dole schemes, had a sense of earnestness in its work. But the repackaged numbers do highlight another fact, one that we already knew and must be reiterated: Growth towards the end of the UPA’s second term began to drop off a cliff, beset as it was with corruption scandals, such as the 2G spectrum allocation scam, the coal allocation scam, gold plating of infrastructure projects and numerous real estate scams. This, coupled with the global financial contagion, whose impacts began to be felt in India, massive amounts of toxic debt loaned out to politically-connected promoters, there is no doubt that the UPA squandered away the huge opportunity they had at hand to keep India on a path of growth. There is also no doubt that in doing so, the UPA themselves laid the red carpet for Narendra Modi’s stunning electoral victory in 2014. And while the Congress has patted themselves on its back for the new numbers, they must bear responsibility for the decline as well.
This slowdown in growth to below seven per cent between 2011-14 is responsible for the contagion in the Indian economy ever since. Millions could not find jobs and countless others lost theirs. And while things are recovering now, making up for three years of lost growth will mean that India will need to clock in some remarkable numbers in the coming decade. Some fundamental reforms undertaken by the Modi Government, especially the bankruptcy code and GST, will play a role towards ensuring just that going forward. But much more needs to be done, private sector investment is still languishing and needs a jumpstart. High taxation rates are crippling consumption in some sectors and India’s failing judicial system is making the country fall down the list when it comes to being a destination for foreign investment. India has no option but to keep its economy growing at a rapid pace. And while the 10 per cent growth figures will grab the headlines, the real story in these numbers highlights the mess that the UPA left India in.
Writer & Courtesy: The Pioneer