Reforms, clarity of leadership led to turnaround, says White Paper

The Narendra Modi government's turnaround of the Indian economy from among the "Fragile Five" in the world to the fifth largest in the world in 10 years is a result of prudent counter-cyclical macroeconomic policy, commitment to reforms and clarity of political leadership compared to policy paralysis, fiscal irresponsibility and corruption under the United Progressive Alliance (UPA) government, a White Paper released by the government on Thursday said.

- Roshan Kishore

The document accused the UPA-regime of severely undermining the country's macroeconomic foundations in its quest to maintain high economic growth by any means after the global financial crisis of 2008. "One such foundation that was severely weakened by the UPA government was price stability. Inflation raged between 2009 and 2014 and the common man bore the brunt. High fiscal deficits for six years between FY09 and FY14 heaped misery on ordinary and poorer households. Over the five-year period from FY10 to FY14, the average annual inflation rate was in double digits. Between FY04 and FY14, average annual inflation in the economy was 8.2%," it said.

The banking crisis was one of the most infamous legacies of the UPA government, the paper added. "The banking crisis in 2014 was massive, and the absolute sum at stake was too large. Gross advances by public sector banks were only ₹6.6 lakh crore in March 2004. In March 2012, it was ₹39.0 lakh crore. Further, not all problem loans were recognised. There was much under the hood."