How about a White Paper on Vision 2047?

Late last week, the National Democratic Alliance (NDA) finally came up with a White Paper on the Indian economy. It was not about the current economic situation and a road map for the next five years but a frontal attack on the United Progressive Alliance (UPA) regime, which was in power from 2004 to 2014. A White Paper was an obvious idea for a government wanting to distinguish itself in every way from the past, which is why I had repeatedly suggested it in my columns during the early years of the NDA government. But why a White Paper in 2024 on what happened in 2004-14? Apparently because it “would have given a negative narrative and shaken the confidence of all, including investors”.

This is a bit rich since the NDA government has missed no opportunity to repeat the Paper’s key allegations: That the two UPA terms were marked by corruption, high inflation, poor capital expenditure and project implementation, fiscal irresponsibility, and policy paralysis. As the drumbeat of the 2024 general elections grows louder, it obviously helps the NDA to consolidate all facts and figures that show the UPA (led by the Congress) in a poor light. There is little one can say to defend the UPA, since the facts presented may even be understated (there aren’t many details about the rampant crony capitalism and widespread corruption in public-sector banks), but the timing and motivation behind the Paper are clear.

The highlight of the Paper is the economic mismanagement of 2009-13. The UPA came back to power in May 2009, when the world was reeling from the impact of the global financial crisis (GFC). India was much less affected by the GFC than Europe, the US, and even parts of Asia. Yet, the UPA government launched a massive stimulus package that “was way beyond the capacity of the Union Government to finance and sustain”. As the paper says, “during the GFC, India’s growth slowed to 3.1 per cent in FY09 but recovered swiftly to 7.9 per cent in FY10… There was no need for the continuation of the misguided stimulus beyond one year”. The result: For six consecutive years between FY09 and FY14, the ratio of India’s gross fiscal deficit (GFD) to gross domestic product (GDP) was at least 4.5 per cent, rising to 5 per cent in three of the six years. The revenue deficit rose more than four times from 1.07 per cent of GDP in FY08 to 5.3 per cent in FY10. Market borrowing shot up but the funds raised went into unproductive use. Not surprisingly, from “FY10 to FY14, the average annual inflation rate was in double digits”. It is here that one would like to pause and ask: Who was responsible for this gross economic mess? After all, the Indian economy was in the hands of a “dream team” (in the hyperbolic words of a business paper) — Manmohan Singh, P Chidambaram, Pranab Mukherjee, Montek Singh Ahluwalia (as deputy chairman of the Planning Commission), C Rangarajan (as chief of the Economic Advisory Council to the Prime Minister), and Raghuram Rajan (as chief economic adviser to the Ministry of Finance).

In a cabinet form of decision-making, it is not easy to pinpoint blame when something goes wrong. Blame gets shared and is diluted. In this case, however, it is easy. The economy was in the able hands of old war-horse Pranab Mukherjee, who was powerful enough to chair 24 of the 39 Groups of Ministers (GoMs). He was finance minister from 2009 to 2012, the fateful period when mindless fiscal profligacy, crony capitalism, corruption, scams, inflation, and high interest rates led the economy to a “fiscal precipice”, according to the White Paper. When things got out of hand, P Chidambaram replaced him. Mukherjee was a pillar of the Congress in every decade starting from the Emergency of 1975-77 to the “crisis” caused by the economic mismanagement of 2009-12. Yet, stunningly, a decade after the evidence of such gross economic mismanagement, when the NDA returned to power for a second term, the Narendra Modi government awarded the Bharat Ratna to Mukherjee in 2019.

A different White Paper

Under the NDA, inflation has been controlled, fiscal prudence has been maintained, and capital expenditure has risen dramatically. Infrastructure projects that were proposed 60 years earlier have been completed and new ones conceptualised and built. Hence, the need to dig up old economic corpses is baffling. If the NDA is confident about its performance, why not have a White Paper to present a road map for the coming 10 years, much like the Chinese five-year plans? Eric Li, a China expert, says while the West thinks China is opaque, the big China picture is always clear. One only has to read the five-year plans to know exactly what is coming — which sectors, which industries, and in which location. “If you look at the history of China’s five-year plans over the last several decades, 85-90 per cent of the plans get carried out as planned,” he says. 

This is what India needs now, instead of a politically motivated document on what happened about two decades ago. Since the Modi government has announced a dozen mega initiatives with actual allocations and substantial progress on the ground, it would have been easy to put it all together in one document, with specific targets and deadlines mentioned. Since this White Paper ends with the statement “Amrit Kaal has just begun and our destination is India a developed nation by 2047”, it is only fair to map how this would roll out.

The writer is editor of www.moneylife.in and a  trustee of the Moneylife Foundation; @Moneylifers