The UPA authorities inherited a “healthy economy ready for more reforms” in 2004 however made it non-performing in its ten years, the white paper mentioned. Despite having taken the reforms earlier in 1991, the then authorities didn’t undertake reforms after coming to energy in 2004.

The white paper has listed comparability of a number of macroeconomic parameters between the UPA and the NDA governments:

Inflation: The first macroeconomic knowledge listed out by the Ministry of Finance within the white paper as having taken the hit within the aftermath of the worldwide monetary disaster of 2008 is inflation. Citing knowledge from the International Monetary Fund (IMF), the ministry mentioned inflation raged between 2009 and 2014 and the widespread 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 per cent,” the ministry mentioned.

Banking: The banking disaster was some of the essential and notorious legacies of the UPA Government, the white paper mentioned. Stating that the excessive share of unhealthy money owed was an underestimate by the UPA authorities, the Gross Non-Performing Assets (GNPA) ratio in Public Sector Banks (PSBs) together with restructured loans rose to 12.3 per cent in September 2013 from 7.8 per cent on the finish of Vajpayee-led NDA authorities. The worsening of the banking disaster was “largely because of political interference by the UPA government in the commercial lending decisions of public sector banks”, the white paper mentioned.

Gross advances by public sector banks have been solely Rs 6.6 lakh crore in March 2004, which then elevated to Rs 39.0 lakh crore in March 2012. “Further, not all problem loans were recognised. There was much under the hood. According to a Credit Suisse report published in March 2014, the top 200 companies with an interest coverage ratio of less than one owed about Rs 8.6 lakh crore to banks,” it mentioned.

The white paper went on to cite former Reserve Bank of India Governor Raghuram Rajan, from his written response to a Parliamentary Panel in 2018: “a larger number of the bad loans were originated in the period 2006-2008.”

External vulnerability: Over-dependence on exterior business borrowings (ECB) led to a surge in India’s exterior vulnerability. During the UPA authorities’s tenure, ECB rose at a compounded annual development price (CAGR) of 21.1 per cent (FY04 to FY14), whereas within the 9 years from FY14 to FY23, they’ve grown at an annual price of 4.5 per cent. “The UPA government had compromised external and macroeconomic stability, and the currency plunged in 2013. From its high to low, against the US dollar between 2011 and 2013, the Indian rupee plunged 36 per cent,” it mentioned.

Mismanagement of public funds: After the 2008 Global Financial Crisis, the UPA authorities introduced a fiscal stimulus package deal which was a lot worse than the issue it sought to deal with, the paper mentioned. “It was way beyond the capacity of the Union Government to finance and sustain,” it mentioned.

Run-away fiscal deficits led the financial system to the fiscal precipice, the ministry mentioned. For six consecutive years between FY09 to FY14, the ratio of India’s Gross Fiscal Deficit (GFD) to Gross Domestic Product (GDP) was at the very least 4.5 per cent. The income deficit rose greater than 4 instances from 1.07 per cent of GDP in FY08 to 4.6 per cent in FY09.

The fiscal deficit burden grew to become too huge to bear, for the financial system, it mentioned. “As a result of its fiscal mismanagement, the UPA government’s fiscal deficit ended up being far higher than it had expected, and it subsequently ended up borrowing 27 per cent more from the market than what it had budgeted for in 2011-12,” it mentioned.

Infrastructure and asset creation: Stating that Public expenditure was geared in the direction of short-term populist measures, the white paper mentioned capital expenditure — which funds public funding in infrastructure — was deprioritised in these 10 years, thereby creating long-term constraints for the financial system and compromising its development potential.

Capital expenditure as a per cent of complete expenditure (excluding curiosity funds) halved from 31 per cent in FY04 to 16 per cent in FY14. “The economy remained supply-constrained during the UPA government’s tenure. Combined with the consistent boost to aggregate demand from excessive deficits, it resulted in higher inflation, higher current account deficit and an overvalued currency, all of which climaxed in 2013 when the Indian rupee buckled under the weight of such imprudent policies,” it mentioned. The authorities’s prioritisation of unproductive spending meant that important funds have been allotted in the direction of consumption relatively than productive funding, it mentioned.

Wastage of public sources and scams: The UPA authorities’s interval was marked by “policy misadventures and scams” resembling non-transparent public sale of public sources (coal and telecom spectrum), the spectre of retrospective taxation, unsustainable demand stimulus and ill-targeted subsidies and reckless lending by the banking sector with undertones of favouritism, the white paper mentioned. It cited the 2G spectrum rip-off involving 122 telecom licenses that sliced Rs 1.76 lakh crore off the exchequer as per the estimates of the Comptroller and Auditor General (CAG), the coal gate rip-off costing Rs 1.86 lakh crore to the exchequer, the Common Wealth Games (CWG) rip-off, indicating an surroundings of “heightened political uncertainty and reflected poorly on India’s image as an investment destination”.

It additionally made a point out of the 80:20 gold export-import scheme launched by the UPA authorities displaying how authorities programs and procedures have been subverted to serve explicit pursuits for “obtaining illegitimate pecuniary gains”. “In mid-2014, the then-government permitted select Premier Trading Houses (PTH) and Star Trading Houses (STH) to import gold even though the model code of conduct was in place and the counting of votes cast in the Parliament elections was due on May 16, 2014,” it mentioned.

The UPA authorities’s time period was replete with examples of resolution stasis, the white paper mentioned. The UPA authorities capitalised on the reforms introduced in by the earlier authorities however fell in need of delivering on essential reforms promised by them.