In a rare move in Indian politics, the Modi government decided to release a white paper on the Indian economy without any prompting from opposition parties. The paper, reflecting the government’s strength, outlines the challenges inherited from the UPA era, emphasizing the need for transparency.
The white paper highlights the Modi government’s success in controlling inflation, reducing headline retail inflation from 9.9% in 2013 to 5.7% in 2023. It credits this achievement to diversifying supply sources and strengthening buffers for key food items, despite global commodity price escalations.
Addressing external stability, the paper notes the significant increase in foreign exchange reserves to nearly $625 billion, showcasing India’s resilience during global shocks. It contrasts the handling of the 2021-22 taper tantrum with the challenges faced in 2013.
The white paper criticizes the UPA government’s high fiscal deficits, citing concerns about undisclosed financial maneuvers. However, it acknowledges the current government’s similar approach, raising questions about fiscal practices.
One area of undeniable focus for the Modi government is capital expenditure, creating records to stimulate long-term growth. The white paper criticizes the UPA for deprioritizing capex, impacting economic growth.
While the paper highlights India’s per capita GDP growth under the Modi government, it avoids a direct comparison of GDP growth rates before and after 2014. Notably, it does not provide a comparable growth number for the pre-2014 period, leaving room for interpretation.
As India approaches the Lok Sabha elections, the white paper provides a comprehensive overview of the economic landscape, allowing for a nuanced understanding of the government’s economic achievements and challenges.
