Here is a quick summary chart on GDP growth and inflation in UPA vs first few years of NDA.
GDP growth and inflation was both higher under UPA, however both dropped rapidly from 2011. I will come to this part soon.
In terms of infrastructure development, rural welfare, financial inclusion and broadening the tax base, NDA has performed better.
UPA vs NDA: This scorecard shows who delivered more when in power
UPA's 10-year report card: Scams, policy paralysis crashes India's economy
PaiIt is true that it is also due to reckless expansionism .But not enacting the Insolvency and Bankruptcy code when UPA had highly brilliant foreign and many educated stalwarts like Manmohan Singh, Chidambaram, Jairam Ramesh, Shashi Tharoor, Abhishek Singvi, Kapil sibal ,Raghuram Rajan like dozen people who knew very very well that such a law is existing in all advanced countries . This leads to the suspicion that this reckless expansionism was deliberate to grab the votes at the cost of national treasury . Also there were some insincere corporates who deliberately led thier big companies to fake sicknesses when the combined exposure of bank loans were in thousands of crores upto Rs50,000 crores . And when the NDA govt enacted IBC snd NCLT tribunals these insincere promoters of such “ sick corporates “ buy themselves in the auction that too in proxy names . That proves the trillions of bank money lent to all these corporates was not above board. Definitely certain bigwigs of UPA were involved . Attempts to sink Punjab National Bank by few persons too points out definite indications that distribution of bank funds in the name of loans was all dishonest deals.
Whenever looking at inflation in India we should always look at the international crude prices going at that time. For most of the time period that you have compared here and the time when inflation is at max, crude oil prices were at their highest. International crude oil price was also high for China and many other countries but they were able to maintain there growth rate higher than inflation. There inflation was as low as 5 per compare to India 12 per at peak. Secondly Modi didn't changed the pricing of petrol u can see they has maintained same level of pricing which was under Mms(High taxation) so people are paying same amount in which they got still they were able to maintain Inflation at decent point. And aslo MMS has brought oil in Oil bonds so passing huge chunk of burden to Next Goverment for payment.
Govt policy & high corruption was the reason for free flow of funds more so the black money. Further the USD jumped from Rs.44/45 to Rs. 69 by end 2010. So our out go also high with very low balance of payment. NDA atleast stabilize our balance of payment and controlled the inflation. Please note the inflation affects the poor more than the affluent. krishna MurthyEverypoint coverd by excellent, when crude is sub 49$ the inflation should come down, but theBJP is raising fuel prices, Demonitstion ie good but the govt didnot implement correctly, so the entire business chain got locked and itcwil take another's 10 years to get GDP to normal + ve territory, all the prices hv gone up, but govt FM is totally mishandled the economy, addade to the disruptive polices on gdt, cas and 370 and handling migrant labour had disastrous prospects and huge unemployment due to varios factors, indis is complex country and two ppl cannot control on all aspects on social, financial and domestic issues
The answer lies in the NPAs of banks. During Congress regime PC have loans on broker fee. So many companies took Loans that the entire banking system was at the brink of collapse when Congress left. Modi had no choice but to take harsh decisions and India's growth was suffering due to lack of liquid with banks. NPAs rose to substantial high and good loans fell sharply. To sustain the banks, some of them were merged. Actually many were merged.
If we bring a white paper on 10yrs of Congress rule we will know how much they looted and how the growth was falsified under upa.
If anyone wants to know the 10yrs rule of Congress just look at the banking
My late father built Jalaram Niwas in 60s. Though he was karmyogi and never worshipped God, he became NEGI RK Bhakt because he got a bank loan, which was so difficult ..
Then I joined PSU Bank in 1981.
Banks have to achieve targets for priority sector and housing loans are big tickets now. But up
Very true. During UPA, to AVOID recession, UPA pumped money into markets through credit cards to business loans without proper credit checks. Thats one of the main reason for inflation to spike too.
But the after effects of those lendings are evident since last couple of years.
I strongly believe.....
Primary reason for intense growth in India from 2004 till 2011 is money rushing from US. There was lot of cash influx from federal reserve into US to pump economy. This money was looking for good opportunities to generate returns and US didn't offer enough avenues. Hence they looked worldwide for opportunities. Some of this money came to India via banks. Banks fueled growth in all sectors by loans.
Post 2011 the money from US went back, as US market itself was giving good returns. Banks dried up and could not sustain the growth. Bad loans started to show as no new money was available to cover it. Since then it has been stagflation and slow economy.
It is that simple and rest is all mumble jumble. It happened in lot of Asian countries and not just India. Indian leadership had very little to do with India's growth or lack of it.
So it is clear that the economic slowdown was in no way related to demonetisation, improper implementation of GST and also only one real estate sector could not be able to drive growth of entire country, we were rivaling growth of China then, now we are growing below Bangladesh. I am in no way supporting UPA, but NDA is a pure disaster for economic and social development.
Essential commodities like Onions are removed from essential commodities for calculating the WPI, hence the real inflation is far higher that what is official. We had tge wort job creation in 45 years even before covid hit us. Suppression of actual numbers and labelling anyone who criticizes the government as anti national is what I could see. Love your country not its politicians.
Crude prices play a major role. During upa the crude price went as high as 145$ a barbell but still the petrol never really went beyond 85 but during bjp it fell to as low as 35$ but we still ended up paying higher price around 85. The reliance petrol pumps which were closed during high rates of upa rule started opening during bjp rule as the price per litre rate advantage was never passed to the end customer. Even during the major recession in 2008 india did very
Glimpses of the past does give an insight that the law makers have not had clear concerns on matters of importance to people of our country. When an industry has such set backs along with incremental gains as seen in the chart, do you think Directors would be satisfied with the performance.
We have considered politics not as a medium for progressive program of policies and performance, but as an institution for accusing each party of being responsible for a pat at the back or a dagger at the back. Issues like unemployment, education standards reforms, security of people, right to speech, medical and health, infrastructure, NPA, law and order are forgotten, but strengthening of party's existence, glorification, political rivalry, blaming each other, defections are becoming major issues. Not forgetting the pandemic which is natural calamity along with floods, people sufferings unheard in the past. Why should not the law makers pass legislation that the party which comes to power should transparently examine the reasons for setback and orchestrate measures to improve in such areas? Isn't it better than indulging in conflicts and blaming each other? Post corona growth reforms have already been put in place. But India needs radical and serious reforms in land and labour laws, judiciary and arbitration. India also needs a very strong focus on food processing. India has potential to export Food and Agricultural products to the tune of 200 Billion. Food processing is where we are still stuck in Stone Age.
India, also recently, opened up it’s defence sector. India is looking export $10 Billion worth of defence products by 2022 and further ramp it upto 25 Billion by 2030.
Post 2011 the money from US went back, as US market itself was giving good returns. Banks dried up and could not sustain the growth. Bad loans started to show as no new money was available to cover it. Since then it has been stagflation and slow economy.
It is that simple and rest is all mumble jumble. It happened in lot of Asian countries and not just India. Indian leadership had very little to do with India's growth or lack of it.
Here is a quick summary chart on GDP growth and inflation in UPA vs first few years of NDA.
It is not a fake businessman. Rather it is the pitfall of agressive expansion without looking at downside. At a certain point of time it was propagated that Indian economy growth is linear and hence many of the business man tried to capatulized the linear growth propaganda of government. I am feeling sorry for some of them. It takes ones life times to establish a company of reasonable statue and many on pretext of high growth forced to turn as defaulter. International crude oil price was also high for China and many other countries but they were able to maintain there growth rate higher than inflation. There inflation was as low as 5 per compare to India 12 per at peak. Secondly Modi didn't changed the pricing of petrol u can see they has maintained same level of pricing which was under Mms(High taxation) so people are paying same amount in which they got still they were able to maintain Inflation at decent point. And aslo MMS has brought oil in Oil bonds so passing huge chunk of burden to Next Goverment for payment.
GDP growth and inflation was both higher under UPA, however both dropped rapidly from 2011. I will come to this part soon.
In terms of infrastructure development, rural welfare, financial inclusion and broadening the tax base, NDA has performed better.
UPA vs NDA: This scorecard shows who delivered more when in power
UPA's 10-year report card: Scams, policy paralysis crashes India's economy
Why was the GDP growth so high in UPA-1 and why did it drop so rapidly from 2011?
The primary answer lies in real estate speculation. From about 2003–04, India’s real estate market had a substantial change. If you had bought/sold land 15 years ago you would know what I’m talking about.
Initially, it was a result of growing incomes of urban middle class who were getting high paying IT jobs. It quickly turned into a game of speculation that entire world played until 2008. Banks gave easy loans to both individuals and businesses. They used the loans to buy more real estate and prices inflation rapidly.
A piece of urban shack that would have gone for 5 lakh rupees in 2003 would have been worth 40 lakhs by 2010. People who were sitting on land made money left and right. They gave generous advice to their children on how real estate is the best way to invest. They also used the new wealth to buy a lot of things — cars, foreign travel and stocks. So it is clear that the economic slowdown was in no way related to demonetisation, improper implementation of GST and also only one real estate sector could not be able to drive growth of entire country, we were rivaling growth of China then, now we are growing below Bangladesh. I am in no way supporting UPA, but NDA is a pure disaster for economic and social development. Crude prices play a major role. During upa the crude price went as high as 145$ a barbell but still the petrol never really went beyond 85 but during bjp it fell to as low as 35$ but we still ended up paying higher price around 85. The reliance petrol pumps which were closed during high rates of upa rule started opening during bjp rule as the price per litre rate advantage was never passed to the end customer. Even during the major recession in 2008 india did very well.
Essential commodities like Onions are removed from essential commodities for calculating the WPI, hence the real inflation is far higher that what is official. We had tge wort job creation in 45 years even before covid hit us. Suppression of actual numbers and labelling anyone who criticizes the government as anti national is what I could see. Love your country not its politicians.
While the world real estate markets collapsed in 2008, India acted quick by flooding a lot more easy money and averted a collapse for 3 more years. At some point the music had to stop. Land prices cannot be growing double every 2 years.
Like in any bubble the music did stop, by 2011–12. Home and apartment prices were so high that middle class were priced out of the market. Inflation was brutal and people had very little spare money. Purchases slowed. Many businesses that were betting on prices constantly going up soon started to feel a pinch. They could no longer borrow as much from the banks to buy.
As the prices started flattening (it still holds — in the last 8 years in most Indian cities real estate prices have been mostly flat) the speculators were fried — caught between an asset that is overpriced and loans with high interest that they could not afford. They stopped paying back the loans. And the growth of Non-Performing assets rocketed from around 2013.
Businesses betting on easy money and booming real estate started collapsing from around 2013. The banks and NBFCs that funded them started shaking rapidly and now they stopped providing a lot of new loans. That meant more misery for businesses — both the speculators and legitimate businesses. And as the fictional wealth from real estate dried up, people also slowed their purchases of everything — from cars to household appliances.
While some of UPA-1’s growth can be attributed to social policies that distributed more wealth to rural areas, a lot of the growth is from the real estate bubble. The same Manmohan who presided a period of high growth (2004–11) also produced the worst growth. He didn’t change. It is just that the bubble popped.
Other than the GDP growth, in almost every other indicator — inflation control, fiscal deficit management, tax base, financial inclusion, infrastructure building and social programs — Modi has done a better job. You probably knew that story already and now the story of why the growth was so high in UPA-1.
I really admire this government on the their innovation point. There are numerous projects going on. DRDO started doing wonderful jobs. Now India started talking about exporting their defence equipment, bullet ( though it is a dream, atleast we have started discussing), foreign relations. Just great. I don't know about macro data but what have seen and I am seeing, I really like Modi Ji.
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