From UPA's inflation woes to Modi’s economic stability, Govt shares White Paper

Decade of easing inflation: Sharing a White Paper in Parliament on Thursday, that compares the state of India’s economic performance with that of the UPA-led decade, the Government highlighted the high inflation that people of the country had to face due to poor policies and high expenditure of the Government. 

“Inflation raged between 2009 and 2014 and the common man bore the brunt,” the White Paper states. This comparison reveals India’s journey from grappling with inflation concerns to achieving stability and resilience.

In the past, India faced challenges in managing inflation, particularly in the food sector. During the tenure of the UPA government, Prime Minister Manmohan Singh acknowledged inflation as a significant shortcoming, underlining the need for solid steps to mitigate its impact. In 2014, inflation remained a pressing issue, with the Consumer Price Index (CPI) registering double-digit figures, reflecting the strain on households' budgets.

“Inflation raged between 2009 and 2014 and the common man bore the brunt. High fiscal deficits for six years between FY09 and FY14 heaped misery on ordinary and poorer households. Over the five years from FY10 to FY14, the average annual inflation rate was in double digits. Between FY04 and FY14, average annual inflation in the economy was 8.2 per cent,” the White Paper stated. 

Fast forward to the present, India stands out for its adept management of inflationary pressures, especially in the food sector. 

“In 2016, the government gave the mandate to the RBI to target inflation in the band of 2 per cent to 6 per cent. Average annual inflation between FY14 and FY23 declined to 5.0 per cent from an average inflation of 8.2 per cent between FY04 and FY14,” according to the White Paper. 

 Average headline inflation during the UPA government vs current government | Image credit: Government's White Paper on Indian Economy 

What is a government White Paper?

A White Paper is a government-issued document designed to outline new policies, initiatives, or achievements, aiming to garner support and assess public sentiment. Typically bound in a white cover, it serves as a platform for presenting key information and analyses to the public.

In line with this tradition, the Modi government announced during the Union Interim Budget presentation on February 1 its intention to release a White Paper. This document compares the economic performance of the Congress-led UPA government over 10 years with that of the BJP-led NDA government during a similar timeframe. 

Surpassing global standards

This economic performance is noticeable amid global economic turmoil which was worsened by the COVID-19 pandemic and the Russia-Ukraine conflict. Compared to advanced economies grappling with soaring food inflation, India's performance has not only been better but strongly commendable, with CFPI figures lower than countries like the US, UK, and Euro Area.

The government’s proactive measures have played a pivotal role in steering India's economy towards stability. Policy interventions, such as amending export policies to ensure domestic food security and importing discounted crude oil to boost energy security, have contributed to containing inflationary pressures. 

The Reserve Bank of India (RBI) has also undertaken necessary policy actions, including repo rate adjustments, to balance inflation concerns with growth objectives.

India's resilience amid supply chain disruptions and natural calamities underlines its economic maturity. Despite challenges such as unseasonal rains impacting wheat crops and a supply-demand mismatch in the dairy sector due to disease outbreaks, the economy has demonstrated resilience and adaptability. Projections indicate a favourable outlook, with CPI inflation expected to moderate further in the coming quarters, supported by factors like normal monsoons and stable crude oil prices.