During the UPA tenure, India witnessed a unique phenomenon. Economic barometers which must witness a rise as an indication of a nation’s progress were falling. Similarly, those barometers which should have decreased went on increasing, leading to economic instability. Some of the barometers which were reversed in the past five years highlighting India’s bright economic future are below.

Fragile Five to Fastest Growing

The Indian economy was considered a member of the ‘Fragile Five’ group of economies in 2013. However, over the past five years under the leadership of PM Modi, India has now become the ‘Fastest Growing Major Economy’ in the world. Multiple reforms have set the economy on a high growth path.

Inflation

It is always desirable that inflation is controlled, as a rise in inflation indicates the increase in the price levels of goods and services. Higher inflation means lesser affordability for all sections of society. Inflation during 2009 to 2014 was 10.10% and the prices of essential commodities were soaring. Under the leadership of PM Modi, during the 2014-19 period, the average rate of inflation has fallen to 4.60%. This has helped the people breathe a sigh of relief.

Ease of Doing Business

India’s ease of doing business ranking actually fell from 132 to 142 under the UPA government between 2011 and 2014. As a consequence, in 2014, when the Modi government came to power, India’s ranking stood at 142. However, in the past five years India saw a massive improvement and it’s ranking improved 65 places from 142nd in 2014 to 77th in 2018 owing to the reforms enacted by the government such as the Insolvency and Bankruptcy Code, electricity access and the Good and Services Tax.

Fiscal Deficit

An increase in the fiscal deficit is a worrying sign for any economy. Under the UPA government fiscal deficit rose up to a high of 5.7% in FY2012. On the contrary, the NDA government brought the economy on a path of fiscal prudence, where the fiscal deficit touched 4% only in their first year and has been below it ever since.

Taxation

Prior to 2014, there were approximately seventeen different indirect taxes in India ranging from octroi to value added taxes imposed by different states. Under the leadership of PM Modi, the Goods and Services Tax was introduced on the 1st of July 2017 replacing all the other indirect taxes with just one tax, ensuring hassle free compliance.

Moreover, tax rates on the people should actually be lower rather than higher. The Modi government, through GST, has reduced the tax rate by half on 99% goods for the common people.

So, from greater number of taxes and higher tax rates, the NDA has reversed the situation to one single tax and lower tax rates.

Non-Performing Assets – Creation vs Resolution

Creation of non-performing assets, especially when propelled by a culture of favouring cronies with loans poses major problems to a growing economy.

Since independence, till 2008, for about 60 years, banks had given Rs 18 lakh crore rupees worth of loans. Between 2008 and 2014, in just 6 years, the UPA government presided over the period in which outstanding loans of public sector banks ballooned from Rs 18 lakh crore to Rs 52 lakh crore.

This is the primary reason for a massive increase in non-performing loans and stressed assets.

The Modi government not only took measures unearth hidden NPAs and bring out the real picture of stressed assets but also came out with a mechanism to reverse the situation and reinvigorate the health of banks. The IBC has been instrumental in successfully resolving NPA woes as Rs 3 lakh crore has been recovered in favour of banks and creditors.

Home Loan Interest Rates

Owning a home is a dream for crores of people. For this to materialize, lower EMI rates help greatly. Buying a house was an expensive proposition in the UPA era. For example, in November 2013, the interest rate for a home loan stood at around 10%. In contrast, the NDA government’s economic management ensured that the interest rate for home loans came down to approximately 8.5% in March 2019.

These figures highlight the positive roadmap for the Indian economy and are a steps in the right direction for India to become a leading economic power.