Is the UPA Truly at Fault

Everyone is talking about the declining GDP growth rate and the ever-high inflation rate. The UPA-led union government is being continuously blamed for the economic chaos, and guess what, the finance minister is counting his achievements. The most prominent of all are the highest decline of Indian currency against the U.S. dollar and the GDP growth at below 5 percent. I will talk in real terms and figures to compare the performance of the economy during the NDA and the UPA reign.

Let me begin with the most vital factor that determines the health of an economy- Gross Domestic Product. The UPA inherited the GDP growth rate of above 8 percent from the NDA, which has now fallen at 4.96 percent. Considerable to note, the UPA began its voyage of administration when the global and domestic markets were at boom. The other comparable figures are the industry growth rate, agricultural growth rate, and the services growth rate that stand at 7.32, 9.05, and 8.06 percent respectively during the NDA rule and at 3.12, 1.79, and 6.59 percent respectively in the UPA rule. The drastic downfall in the industrial and agricultural growth rate will be the bottlenecks for the new government; while moderate decline in the services growth rate can be linked with thrilling outsourcing to the IT sector wherein the government hasn’t played any role.

Inflation, that has restricted the households to just the necessities, mounted to 7.8 percent (WPI) in the FY 2013 while the same stood at 5.5 percent in the FY 2004. Another notable achievement of the NDA reign was the 61 percent increase in the GDP during the FY 2003 in comparison to the FY 1998. Let me now share a few vital economic ratios to enlighten the works of Chidambaram. The ratio of net market borrowing/budget expenditure has touched 38 percent in the UPA reign, which stood at 18.8 percent in the FY 2004. The environment, when the UPA took over the governance from NDA, was highly appreciative and the same ratio during the FY 2005 dropped under 10 percent. However, the subsequent years witnessed inefficient spending by the central government and hence no improvements could be achieved.

The debt/GDP ratio of the union government was above 60 percent during the NDA ruling and this can be linked with the implementation of the much-needed Fifth Pay Commission which almost doubled the wages. Vital to note, the NDA lowered the rate of interest on small savings and the resulting savings in the interest accompanied with global growth flowed to the UPA government, however the aimless policies of the government were unable to fetch any positive benefits. The substantial market borrowing of the UPA government together with the funds extended by the Reserve Bank will add to the worries of the new government. A figure not at all to be proud of is the 63 percent increase in the households’ cost of living from the end of 2008 to the end of 2013.

It is evident that after having inherited a robust economy from the NDA, the UPA ruined it to such an extent that the upcoming government will have to leave no stone unturned to get this fixed. Plus, tough and visionary measures will be the need of the hour.

93 thoughts on “Is the UPA Truly at Fault

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  19. Satbir Singh Bedi

    This is an excellent article. UPA has really brought to the economy to the brink of ruin by its wrong policy and rampant corruption.

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  20. Arun Sakhuja

    Absolutely right UPA Government and its policies are totally disastrous for the economy and the society as a whole that’s why everyone is so angry and looking forward for a change

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  21. Dr.Sunil Gupta

    Yes its a fact that general public is inconsolably upset with the running government. Any one who has love towards the country shall never be praising this government

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  22. Chayan Jana

    It would have been very nice if you would have compared the NDA Govt with UPA 1 and UPA 2 in terms of No of Scams, Total value of scams. The clear picture of corruption will be very interesting to observe. Can you do that please?

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  23. Sanjay Singh

    The material herein is good reading but I am a lay man in this sector . A few questions arose in my mind :- What was the scenario when NDA Took over from UPA ? International inflation effect on price rise ? Restrictions of Minority govt with Allies ? Scams etc cannot be totally controlled by anyone , be it NDA or UPA or AAP or left . We sustained even during worst Global economic decline n disturbances world over . U have to compare other countries Also . As u wil become sound n need More comforts the prices wil increase Many fold . Only sufferer is ordinary , poor n Below middle class .. I think better discard both big parties to give them a jolt of life . Both r equally guilty whenever they come to power

    Reply

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