Govt put economy among 'top five' globally, revitalised financial sector, overhauled credit ecosystem

An inheritance of a reform ready healthy economy rendered non-performing in 10 years, squandering away of credit for the 1991 economic changes after coming to power in 2004 and the UPA Government’s quest to maintain high economic growth by any means after the global financial crisis of 2008, severely undermining the macroeconomic foundations are among the key miscalculations of governance by the Congress-led coalition in power between 2004-2014, according to the White Paper presented by Finance Minister Nirmala Sitharaman on Thursday.

- NIVEDITA MUKHERJEE

The Paper highlights banking crisis as one of the most important and infamous legacies of the UPA government, the banking crisis in 2014 was massive, and the absolute sum at stake was too large. The gross advances by public sector banks were only 6.6 lakh crore in March 2004 while in March 2012, it was 39.0 lakh crore, the Paper states. It also blames the UPA’s inability to recognise all the problem loans, leaving ‘much under the hood’. The Paper quotes a Credit Suisse report published in March 2014 that the top 200 companies with an interest coverage ratio of less than one, in fact, owed about 8.6 lakh crore to banks. Nearly 44 per cent of those loans (3.8 lakh crore) were yet to be recognised as problem assets. That alone would have added another 6.7 per cent to the GNPA ratio.