Centre's white paper lists how Modi govt 'rescued economy from state of crisis'

The white paper on economy was tabled in the Parliament amid the ongoing Budget session

The white paper on the economy, released by the Centre on February 8 to point out the alleged flaws in the economic management of the erstwhile United Progressive Alliance (UPA) government, lists the measures that were taken by the Narendra Modi-led government to "rescue the economy" from a "state of crisis, despair and paralysis".

According to the BJP-led dispensation, when they assumed office, the economy was on a "road to nowhere", and was showing signs of distress emanating from multiple policy "wrong turns".

"As soon as our government took over in 2014, we recognized the urgent need to revamp and overhaul systems and processes, to help India advance on the path of development while also bolstering its macroeconomic foundations," the document, which was tabled in the Lok Sabha by Finance Minister Nirmala Sitharaman, stated.

'New governance paradigm'

The white paper claimed that Prime Minister Narendra Modi implemented a new governance paradigm, which marked a shift as compared to the preceding decade that was characterised by "inefficient policy design and implementation mechanisms, resulting in a stagnating economy".

From the "digital revolution" to the elimination of open defecation, and
from successfully vaccinating the entire eligible population using indigenous vaccines to substantially diversifying exports, the country "achieved remarkable milestones" under this new governance paradigm, the paper said.

The government, since 2014, has focussed on simplification and rationalisation of laws, adopting a "trust-based and responsive delivery machinery", ease of doing business reforms to unleash the potential of every sector, inclusive and empowering scheme designs focused on partnerships with the citizens and also with the states through "strengthened cooperative federalism", it added.

Contrary to the piecemeal delivery of the past, "we have achieved saturation coverage for all deserving beneficiaries", the government claimed, adding that the focus of welfare was shifted from entitlement-based support to empowering individuals by integrating them into the formal sector.

Investor confidence

The initiation of the reform process started yielding positive results in the early years of the Modi government, the paper stated, adding that it improved the investor climate and created a "favourable outlook for the economy".

The industrialists who earlier preferred to invest in other countries exhibited a new sense of excitement for investing in India, it claimed.

The paper cited an International Monetary Fund (IMF) report, dating back to 2015, that stated that "India's near-term growth outlook has improved and the balance of risks is now more favourable, helped by increased political certainty, several policy actions, improved business confidence, lower commodity import prices, and reduced external vulnerabilities."

The paper added that two years later, in 2017, another IMF report upgraded the global body's optimism about India, as it said: "Medium-term growth prospects have improved due to the implementation of key reforms, loosening of supply-side bottlenecks, and appropriate fiscal and monetary policies that enhance macroeconomic stability".

'Financial sector revitalised'

In the past 10 years, the Centre has "revitalised the stagnant financial sector" and overhauled the credit ecosystem within the economy, the white paper claimed. The reforms it cited include the implementation Insolvency and Bankruptcy Code (IBC), and the measures implemented by the RBI and the government to strengthen the balance sheets of the banking sector.

This led to a decline in the ratio of the gross non-performing assets as a proportion of gross advances to a multi-year low of 3.2 percent in September 2023, it pointed out.

The restored profitability of public sector banks then and now tells its own story of rescue, recovery, and rejuvenation, the paper said. This comes a day after Modi, while addressing the Rajya Sabha, credited his government for the surge in the value of PSU firms by 78 percent since 2014.