Decoding the WHITE PAPER of the Indian economy? : Economic case study
Think Schoolγ»2 minutes read
The Indian government's White Paper on the economy praises the BJP's economic reforms, contrasting them with the UPA's mismanagement highlighted through inflation rates, non-performing assets, and Forex reserves depletion. While the UPA government focused on revenue expenditure and loan waivers, the BJP government prioritized reducing inflation, increasing FDI, boosting capital expenditure, and implementing systemic changes like the Indian Bankruptcy Code to improve infrastructure growth and economic development.
Insights
- The White Paper of the Indian economy highlights the contrasting economic management approaches of the UPA and BJP governments, showcasing the BJP's reforms that led to reduced inflation, increased FDI, and enhanced capital expenditure, emphasizing infrastructure development.
- Finance Minister Nirmala Sitharaman's analysis in the White Paper criticizes the UPA government for mismanagement, high inflation rates, depleting Forex reserves, and lack of infrastructure investment, while praising the BJP's focus on reducing inflation, increasing FDI, and implementing systemic changes like the Indian Bankruptcy Code to improve economic indicators.
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Recent questions
What is the Indian White Paper?
A detailed analysis of the Indian economy.
How did the UPA handle inflation?
Poorly, with rates reaching double digits.
What were the UPA's shortcomings in infrastructure development?
Lack of investment and capital expenditure.
How did the UPA manage Forex reserves?
Depleted from 17 months to 6 months.
What were the UPA's responses to economic crises?
Excessive spending and high fiscal deficit.
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Summary
00:00
Indian Economy: White Paper Analysis 2024
- On 8th February 2024, the Indian government launched the White Paper of the Indian economy.
- Finance Minister Nirmala Sitharaman presented a 60-page analysis of the Indian economy, criticizing the previous UPA government's handling.
- The White Paper highlights the BJP's role in transforming the Indian economy from a struggling state in 2014 to a prosperous one in 2023.
- The document accuses the UPA of causing economic distress through scams and mismanagement, contrasting it with the BJP's reforms.
- The White Paper emphasizes the UPA's failure to control inflation, with average rates reaching 8.2% and even double digits in certain years.
- It points out the mismanagement of banks, showcasing a rise in gross non-performing assets from 7.8% to 19% during the UPA regime.
- The White Paper criticizes the UPA for depleting Forex reserves from 17 months in 2004 to just 6 months in 2013, necessitating measures like FCNR accounts.
- It scrutinizes the UPA's response to the 2008 global financial crisis, highlighting excessive spending leading to a high gross fiscal deficit.
- The document questions the UPA's capital expenditure, noting a drop from 31% to 16% during their tenure, impacting infrastructure development.
- The White Paper contrasts the UPA's highway construction record unfavorably with the NDA's achievements, suggesting a lack of infrastructure investment.
14:42
"UPA vs BJP: Fiscal Policies Compared"
- UPA government borrowed money but didn't invest in important projects like highways.
- UPA spent heavily on revenue expenditure, including a significant agricultural debt waiver scheme in 2008.
- The 52,000 crore Farm loan relief scheme benefited millions of small and marginal farmers.
- Despite loan waivers, farmers didn't increase investments or income, leading to adverse effects.
- Both UPA and BJP governments engaged in significant loan waivers to please farmers.
- UPA criticized for overspending on revenue expenditure and not utilizing funds for social schemes.
- BJP government focused on reducing inflation, increasing foreign direct investment, and boosting capital expenditure.
- Inflation was brought down to 5% annually from 8.2% previously, with a strict target set by the RBI.
- FDI nearly doubled from 2015 to 2024, significantly increasing India's foreign reserves.
- Capital expenditure increased from 16% in 2014 to 28% in 2024, resulting in infrastructure development.
- BJP reduced the compound annual growth rate of revenue expenditure, leading to increased infrastructure growth.
- Indian Bankruptcy Code was a significant systemic change, reducing non-performing assets from 12.3% to 3.2% by 2023.
