Finance Minister Nirmala Sitharaman tabled a 'white paper' on the Indian Economy in the Lok Sabha on February 8, which blamed the erstwhile UPA government for the "mountain of bad loans" and "double-digit inflation" in the period before the Narendra Modi-led government took charge.
The white paper is aimed at highlighting the alleged economic mismanagement under the United Progressive Alliance government, which was led by the Congress from 2004 to 2014.
"The UPA government failed miserably to facilitate economic activities. Instead, the UPA government created hurdles that held back economy. It basked in the after-glory of the lagged effects of the reforms of the Vajpayee-led NDA government and benign global conditions and proceeded to exploit the resultant fast economic growth for narrow political purposes," it stated.
The result was a "mountain of bad loans", a high fiscal deficit despite "much of it being hidden", a high current account deficit, "double-digit inflation for five years" which hit the pockets of many Indians and "membership of the club of 'Fragile Five' in 2013", the document added.
Fragile Five was the term issued to India, along with Turkey, Brazil South Africa and Indonesia, by investment bank Morgan Stanley for allegedly being too reliant on foreign investment to fuel their growth ambition.
'Drove investors away'
The economic policies of the UPA government drove investors away from the country, the paper claimed.
The coalition government "not only failed to impart dynamism" into the economy but also "robbed the economy" of it such that our industrialists went on record stating that they would "rather invest abroad than in India", it said.
"To drive investors away is easy but to win them back is hard. The UPA government also demonstrated that it is easier to hurt the economy than it is to help it. They inherited a healthy economy and bequeathed an enfeebled one to us. We have restored its vitality," it further noted.
The release of the white paper is timed ahead of the upcoming Lok Sabha elections in which the Narendra Modi-led National Democratic Alliance (NDA) government is seeking a third consecutive term to power.
The paper states that the government chose not reveal the shortcomings of the UPA earlier, as it would have further "shaken investor confidence".
"In 2014 when we formed the government, the economy was in a fragile state…Our government refrained from bringing out a white paper on the poor state of affairs then. That would have given a negative narrative and shaken the confidence of all, including investors," it said.
The need of the hour was to to attract investments, both domestic and global and to build support for the much-needed reforms, the paper said, adding that the government believed in 'nation-first' and not in scoring political points.
"Now that we have stabilised the economy and set it on a recovery and growth path, it is necessary to place in the public domain the seemingly insurmountable challenges – left behind as a legacy by the UPA government," it said.
In response to the Centre's white paper, the Congress said it would be releasing a 'black paper' that would point out the flaws in the Modi government's handling of the economy over the last 10 years.
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