The Failed Decade
UPA (United Progressive Alliance) an alliance that stopped the progress of India for a decade. One word, Corruption, period. 2004–2014, a decade, a hope, a generation was lost, ruined, failed.
UPA in 2004 formed the government with external support from BSP, SP, Left Front, and Kerala Congress. Manmohan Singh, ex-Finance Minister, was appointed as Prime Minister of India. The UPA government inherited 7% economic growth in 2004–05 from the earlier government and bequeathed 5% growth to the subsequent government in 2014–15. Despite the Economic Reformer, Financial Minister, RBI Governor, and Opposition’s leader in Rajyasabha being the Prime Minister. What exactly resulted in the fall of the economy? Is it because of PM muteness or Pressure from allied forces or extended support forces or the Chair Person of Congress?
In the UPA-1 (2004–09) tenure the GDP was rising to meet the double-digit and inflation was under control. Is this because of the Manmohan Singh and his Cabinet or the previous government policies and healthy global economic growth at the same time?
NDA Policies (Pre-UPA-1):
NDA policies (1998–2004) helped the growth in GDP by 7.9% in 2003 and brought inflation from 13% in 1998 to a mere 3.5% in 2003 and created employment for 58 million people in their tenure. This is a boon for the subsequent government. His slogan ‘Shining India’ didn’t work but his policies made India shine for four more years under UPA-1.
The policies are:
1. Golden Quadrilateral to connect the four corners, four Metropolises, and major production centers of the country by road. To develop the inter-state ship transport through connecting major rivers (Sagarmala) was halted to complete road and other main infrastructures. 95% of the project was ready by the time Vajpayee demitted his office. This connected the rural areas by ‘PM Gramin Sadak Yojana’.
2. The New Telecom Policy act 1999 allowed the companies to provide mobile services on a revenue share basis instead of the fixed fees. This attracted large investments and good competition in the Telecom industry. He was coined as the Father of modern telecom in India. Telecom is one of the most success stories of Private Sectors in India.
3. FRBM act of 2003 to bring the discipline on government budget spending and to limit the fiscal deficit under 3%.
4. Reformation of the power sector promoted private sector participation and competition.
5. Low-Interest rates at a little higher than 5% attracted the housing loans and financial sector reformation helped the insurance sector and in the process reduced the bad loans and helped the banking sector.
6. Improved National Security with Pokhran Nuclear Tests.
7. Settled border disputes with China and Pakistan and improved trades with the countries.
8. Extended hands to end the cold-war distant relation with the USA and helped to bring a lot of investments from the USA during the information/software sector boom.
9. Extended the foreign investment policies and made a way to invest and do business easily for foreign companies and as well as for NRIs’.
NDA with its policies improved the GDP growth and stagnated inflation growth under 3% and inherited it to the following Government, UPA-1. NDA government faced threats from China and Pakistan, the Kargil War and the Oils spiked due to Gulf wars but brought the inflation from 13% in 1998 down to 3.9% in 2004. UPA-1 with its short-sighted policies to improve GDP and with the help of booming Information Technology and the automobile sector in India in 2004–2011 helped the government to maintain the GDP between 9–10% growth annually and thanks to visionary Policies of ABV and global economic growth too. There has not been around a 5% growth in GDP in the last two years of UPA-2.
Where did we lose the decade under UPA from bolstering GDP growth around double-digit to mere in the end?
The Great Depression, the economic recession in 2008–09, hit the global economy and a blast, that spikes were all gone and took a deep dive to 3.1% growth in 2008. FDI, Foreign Direct Investment played a good role in India’s GDP growth during UPA-1. NDA created 58 million jobs in 8 years (1996–2004) whereas UPA added just 1 million in five years as per NSSO (National Sample Survey Office). All the fruits were juiced and empty glasses were on the table. The subsidies were higher than the previous and the later governments.
Now, UPA-2 (2009–2014) was with empty glasses with the FOREX reserves were cut short to 25% under UPA-1 with Foreign Debts increased by three and a half folds (350%) in just five years implied the fall of rupee on the global market from ₹39 against a dollar in 2003 to ₹61 against a dollar in 2012. With the bill for FDI and stability in government added the GDP growth to 8.5% and the following year to 10.3%. With the increase in GDP, the urge for the Goods and Services increases which increases capital investment and employment but with eligible scams on Iron, Bauxite, and Coal and the economic recession the banks stepped back to provide the capital which resulted in high inflation around 10%. Inflation under UPA for ten years was never under control from 2006–2013. The growth of inflation with GDP is very bad for a growing economy.
Even the Agriculture was considered risky which provides 50% employment with just 18% GDP share. Employment grew only at a rate of 2.2% annually despite the economic growth. FDI in retail showed the true colors of UPA which put 50 million local traders to strike on roads. They started a campaign with the AAM ADMI slogan in 2003 and brought the same people on to roads to fight for their lives against the government.
Not only stagnated and diving GDP and growing Inflation, falling Rupee backed off the investors and banking sector but the corruption too played a very pivotal role in the failed and ruined years. The corruption was everywhere from under the ground to the space. There were more scandals by the government than the economic reformation policies in Ten years. Even the Prime Minister was accused of involving in those scandals.
Some listed scams are:
1. 2G spectrum scam in 2007 was about Telecom bids, CAG reported there was a scam of Rs. 1.76 lakh crores, which is equal to one fiscal year budget of a state like Telangana.
2. Commonwealth Games Scam, 2010, estimated to be around Rs. 70,000 crores.
3. Tatra truck Scam, involved army in to scam
4. Chopper Scam, involved Air force in to scam
5. Coal mines Allocation Scam; CAG reported that scam is around Rs. 1.86 lakh crores.
6. Aadarsh Scam, allocated land of defense to private equity.
7. Andhra Pradesh EMMAR scam in 2010
8. INX media case accusation on P. Chidambaram, then Finance Minister for money laundering.
Here and there a lot of unaccounted and indirect money laundering cases were registered on local state ministers, parliament, and assembly members. There were cash-for-vote scandals too buy the votes in Parliament to show their power in the confidence vote. There were many accusations on Robert Vadra, husband of Priyanka Gandhi, who was accused of money laundering under the UPA government.
In ten years of governance of UPA, the economy faced stalling growth, weakening rupee, rising inflation, and growing deficit. The unemployment rate was at a peak high with the rise in graduates in young India. The history remembers the UPA’s governance as corruption. These all resulted in a decrease in foreign investments and declining GDP growth to 5.5% by the end of UPA-2 tenure. UPA-2 created just 15 million jobs in five years with 65% of 1.2 billion were under just 35 years of age. No improvement or policies to train the labor to be skilled. The young India and growing India in Information era hopes were ruined and 2014 started again where it took off from 2004, at least it has better hopes. A decade of young generation was lost.
Bibliography:
1. Article, Economic Reforms In India Under UPA-1 and UPA-2 and Resulting Consequences in qrius.com
2. The Story of India’s Lost Decade (2004–2014) article from thepicture.org
3. www.ceicdata.com for all the analytical data
4. 5 decisions by Atal Bihari Vajpayee that changed India article published in India Today
5. Manmohan Singh: A Legacy of Records article published in Live Mint.
