GROWTH INTERRUPTED

As the UPA Government nears the completion of its second term in May, it leaves a mixed bag for the Indian economy. Much of the good work done in the first five years was undone because of policy paralysis, corruption, falling investment and high inflation in the next five. Taking over from the BJP- led

NDA regime in 2004, the Congress-led Government saw India’s GDP growth rise from 8.3 per cent in 2003-04 to 9.6 per cent in 2006-07 as it benefited from a global economic boom. The stock markets—which had turned jittery when

UPA was voted into power, with BSE Sensex shedding 10 per cent—soared, touching the 20,000 mark in October 2007. India, it seemed, was fulfiling Goldman Sachs’ prediction of becoming a superpower.

The cheer didn’t last. In 2008, world’s financial markets crashed. An extended stimulus package announced to shield Indian markets from the free-falling global econ- omy paved the way for high inflation while the rupee sank to a record low of 68.75 to the US dollar in August 2013. Rising prices of oil and gold, both of which India imports in large quantities, did not help matters. The 2G spectrum and coal mining scams then surfaced and decisionmaking came to a halt. Domestic investment bore the brunt—proposed investments dropped from Rs 17.3 lakh crore in 2010-11 to Rs 5.6 lakh crore in 2012-13. GDP growth fell to an abysmal 4.5 per cent in 2012-13 with the Government estimating it to rise only marginally to 4.9 per cent in 2013-14. “While the average growth in the past 10 years is 7.7 per cent, the slowdown in the last few has been sharp and deeply disappointing,” says Ajit Ranade, Chief Economist, Aditya Birla Group. This can be largely attributed to an investment drought, he adds.

This squandering of the economic boom of the initial years, this souring of the India Story, is what the UPA Government will be remembered for. INDIA TODAY tracks how this legacy was shaped.