Finance Minister Nirmala Sitharaman presented the ‘White Paper’ on the Indian Economy in Lok Sabha on February 8, prepared by the Ministry of Finance, essentially comparing the 10-year record of economic governance under the Congress-led UPA governments(2004-05 and 2004-2014) with the 10-year record of the BJP-led NDA governments (between 2014-15 and 2023-24).
The decision to announce the document was made known earlier amidst the ongoing Budget session of Parliament, which has been prolonged until February 10th.
Parliamentary Affairs Minister Pralhad Joshi had indicated that the paper would compare the state of the economy pre and post-2014, providing a comprehensive analysis of the economic policies and their impacts.
What exactly is a White Paper?
Essentially, it’s a government document that dives into new policies, issues, achievements, backed by thorough research and facts. A white paper typically highlights information about a specific issue. In that sense, what was presented in the Parliament on Thursday was not exactly a white paper, as it draws comparison between the record of two governments on a variety of economic parameters.
Why is the paper being presented now?
The document explains why the white paper is being presented after 10 years instead of at the beginning, “Our government refrained from bringing out a white paper on the poor state of affairs then, that would have given a negative narrative and shaken the confidence of all, including investors. The need of the hour was to give hope to the people, attract investments, both domestic and global and to build support for the much needed reforms”
What is the purpose of this White Paper?
The primary goal is to inform citizens about the governance, economic and fiscal challenges inherited by the NDA government in 2014. By outlining the nature and extent of these crisis, the White Paper provides transparency regarding the starting point of the government’s economic journey.
It informs about the policies and measures that NDA government took to restore the health of the economy since 2014.
By presenting comprehensive information, the paper seeks to stimulate a broader and more informed debate on the importance of national interest and fiscal responsibility in governance.
The document draws inspiration from Prime Minister Modi’s vision, as articulated in his last year’s Independence Day speech which was “To commit ourselves to national development, with new inspirations, new consciousness, new resolutions as the nation opens up to immense possibilities and opportunities”
Notably, this isn’t the first time Modi government has presented a White Paper. Previously, in August 2014, a White Paper on the revenue model for the railways was released as well, followed by another on the rationalization of freight and fares. However, there are no specific rules governing the issuance or frequency of White Papers in the Lok Sabha’s rules of procedure and conduct of business.
The highlights of the White Paper
The 58-page document comprises three main sections, each addressing distinct facets of India's economic journey. The first section analyzes the macroeconomic landscape during the 10-year tenure of the UPA government. The second part spotlights on various corruption scandals that marred the UPA era. Finally, the third segment outlines the strategies and initiatives undertaken by the NDA government to uplift the economy.
One of the White Paper's key revelations is the assessment of the economic legacy inherited by the NDA government from its predecessor. It highlighted that despite inheriting a robust economy for further reforms, the UPA administration failed to capitalize on this potential, leading to a decade of underperformance.
The document takes into account how the UPA's abandonment of economic reforms and misguided policies post the 2008 global financial crisis contributed to rampant inflation, a soaring fiscal deficit, and a significant increase in non-performing assets in the banking sector.
The White Paper sheds light on the fiscal mismanagement during the UPA regime, emphasizing the government's heavy reliance on market borrowing and its inefficient allocation of funds. It reveals a stark decline in capital expenditure as a percentage of total expenditure, signalling a neglect of critical sectors such as health and defence. The report also highlights how policy paralysis impeded defence preparedness, leading to chronic shortages of combat-ready equipment and ammunition by 2012.
In contrast, the White Paper lauds the NDA government's efforts in steering the economy towards recovery and growth. Drawing upon data from international bodies like the IMF, the document showcases how the NDA's tenure witnessed improvements in key economic indicators such as headline inflation.
It highlights the success of various government schemes, such as the construction of toilets and the expansion of banking services, which have yielded tangible results under the NDA decade.
During the presentation of the Interim Budget 2024-25 in Parliament, it was stated that India’s economy was in “crisis” in 2014, the year Modi government took power, and blamed previous governments for the “mismanagement”
The crisis of those years has been overcome, and the economy has been out firmly on a high sustainable growth path will all-around development”, the finance minister said during her speech on February 1.
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