Making Sense of the UPA vs NDA Economic Growth Debate
A heated political debate has been brewing between two accomplished lawyers, namely the last two finance ministers of India, P Chidambaram and Arun Jaitley. The debate began on the backdrop of the data released by the National Statistical Commission which stated that the GDP growth rate under the UPA was higher than the current GDP growth under the NDA government.
Of the various arguments that have been put forth by different parties of the political spectrum, I resonate most with the arguments put forth by ET’s Saubhik Chakrabarti in the article “UPA vs NDA: Why higher growth doesn’t matter when followed by policy delinquency“.
I believe that a lot of economic numbers achieved by UPA were because of the stable platform handed over by the Atal Bihari Vajpayee Government and the steroid (read: debt) fuelled hyper-growth of the worlds’ economy. The mirage of the strong economic power-house created by the UPA between 2004 and 2010 was blown away by the huff & puff of a crumbling world economy.
UPA entrusted PM Modi with a country that was in turmoil: banks saddled with massive NPAs, high inflation, policy paralysis, low growth numbers, tax terrorism that was driving away FDI, Government-run SEBs that were out of money, runaway spending on thoughtless welfare schemes and most dangerously a demoralised & disillusioned class of entrepreneurs that had been maltreated by the government. UPA’s policies & constant infighting stifled any hope of supporting growth and innovation.
I find myself sympathising with the Modi-led government because it braved strong headwinds in the global economy, maintained fiscal prudence and smartly bailed out the banking, power and manufacturing sectors from the brink of collapse, to bring India to the position of the world’s fastest-growing major economy.
I believe that my contradicting views of the two governments are best represented by the contradicting mindset that I woke up with in these two time periods. When I woke up under the watchful eyes of the UPA government, I constantly felt that the worst was yet to come, however when I woke up today to write this post at 4 am, I was certain that the best our economy has to offer – has just begun!
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