Compared to the NDA rule, the UPA tenure of eight years has been characterised by faster growth, higher savings and investment, growing foreign trade and capital inflows and increased infrastructure spending, according to a a new study by three economists in three universities.
In fact, the study completely demolishes the accepted notions of what the UPA has achieved, and concluded that the only problem was that the UPA did not know how to handle accelerated growth and its report card — on the basis of which this election is being fought. The communication problem of the UPA is obvious because neither prime minister Manmoahn Singh nor Congress president Sonia Gandhi are good communicators and are silent most of the time, letting contrarion loudmouths peddle half truths, the study, which will appear in EPW this month, says.
Maitreesh Ghatak, of the London School of Economics, Parikshit Ghosh of the Delhi School of Economics and Ashok Kotwal of the University of British Columbia, demolish the perception that the UPA tenure was about bad governance and that the corrupt rule the roost. In fact, the notion that various people made money comes because a lot of wealth was created and "growth can unleash powerful aspirations as well as frustrations and political parties who can tap into these emotions reap the benefits". In Antarctica, there is no theft, because there is nothing there, the authors point out to establish the other extremity.
Land acquisition became a headline grabbing problem under the UPA precisely because the economy was growing fast and there was pressure to convert a lot of agricultural land into high value use. Just like in a recession, growth periods too have various social and political fallout, which in this case the UPA was unable to handle, or even get a finger on.
In all crucial parameters, the UPA achieved stellar growth even when set against global parameters. The 2008 recession hit India too but it bounced back, the study says. On reforms, growth relative to rest of the world, the performance of the stock market, on compounded annual growth rate, on outstanding public debt, saving and investment and capital formation, the UPA has been well ahead of the NDA.
The economists admit that they haven't got a fix on how the food prices grew above other prices, because the pattern everywhere is that food prices only follow the normal inflation. This has now turned out to be the biggest minus mark against the UPA.
In fact apart from the recession period there was growth all round in India. "The global recession didn't help even though India suffered less compared to the global average and to China. Voter fatigue, especially given higher expectations given the earlier growth is another factor," Ghatak told dna.
A few instances from the study will suffice to show how propaganda scores over facts. The BJP is perceived to be a business-friendly party and the Congress just a party which spends (basically for the poor, which the middle class hates) and lives on debt. Pink papers are quick to announce that the stock market rallies whenever a survey shows the BJP will come to power.
Soon after coming to power in Rajasthan in December 2013, the first thing that the Vasundhara Raje government did was ban foreign retail in the state. Business friendly?
And the Sensex. The benchmark index was flat under the NDA. The rise of the 30 leading stocks of the BSE has been "nothing short of spectacular" during the UPA rule, until 2008, the study points out. "The UPA decade has seen some of the fastest growth in the post-liberalisation era, except for in the last 2 years."
Outstanding public debt during the NDA rule grew from 50 per cent of GDP to 61 per cent. Since the UPA took over, it has come down to 48 per cent. Also, a third of GDP has gone toward capital formation in UPA, compared to only a third during the NDA regime.