What caused the economic downturn in India during the last UPA government?
3 ANSWERS
Nagarajan Srinivas, Politically apolitical.
CORRUPTION.
Alok Pandey is right in his answer that policy paralysis was the cause of economic down turn, but it was corruption in the corridors of power which was the root cause of this policy paralysis.
If we consider the global economic scenario during the UPA-II reign in India- burgeoning oil prices going through the roof, the financial crisis and the great depression in the biggest economy in the world, the Euro zone crisis, the series of political turmoil in Iran,Syria and Ukraine - we can even consider that the Government did reasonably well to keep Indian economy insulated from the after shock of all these debilitating developments. Indian economy continued to grow, and income levels kept increasing, though the fiscal and current account deficits started causing concern and inflation started rearing its ugly head.
The actual downturn started by mid-2010, when scandal after scandal like 2-G Spectrum allocation, Asian Games, allocation of coal blocks etc etc, started bursting upon the unsuspecting Indian polity one after another with bewildering frequency. This lead to a crisis of credibility of the government, and caused a disconnect between the Government and the autonomous institutions like Reserve Bank of India, the Higher Judiciary and the Comptroller and Auditor General (CAG) who started closely scrutinizing and questioning each and every action of the Government.The Prime Minister and the other cabinet ministers had to expend all their energies in containing the damage caused by these wave of corruption charges, they were left with little or no energy for any affirmative action to focus on economic growth and development.
This loss of moral face by the government also emboldened the opposition both inside and outside Parliament to disrupt whatever feeble moves the embattled government made from time to time to stem the rot or push for some reforms.With the General elections looming large over the horizon, and the prospect of a near certain electoral defeat staring them in the face, the government, and with it,the domestic economy, started resembling a sick man in the throes of his death bed
This is how the corruption caused policy paralysis, leading to total lack of either preventive measures or pro active actions from the government, and the economic downturn was the inevitable fall out of this loss of governmental authority and credibility.
Alok Pandey is right in his answer that policy paralysis was the cause of economic down turn, but it was corruption in the corridors of power which was the root cause of this policy paralysis.
If we consider the global economic scenario during the UPA-II reign in India- burgeoning oil prices going through the roof, the financial crisis and the great depression in the biggest economy in the world, the Euro zone crisis, the series of political turmoil in Iran,Syria and Ukraine - we can even consider that the Government did reasonably well to keep Indian economy insulated from the after shock of all these debilitating developments. Indian economy continued to grow, and income levels kept increasing, though the fiscal and current account deficits started causing concern and inflation started rearing its ugly head.
The actual downturn started by mid-2010, when scandal after scandal like 2-G Spectrum allocation, Asian Games, allocation of coal blocks etc etc, started bursting upon the unsuspecting Indian polity one after another with bewildering frequency. This lead to a crisis of credibility of the government, and caused a disconnect between the Government and the autonomous institutions like Reserve Bank of India, the Higher Judiciary and the Comptroller and Auditor General (CAG) who started closely scrutinizing and questioning each and every action of the Government.The Prime Minister and the other cabinet ministers had to expend all their energies in containing the damage caused by these wave of corruption charges, they were left with little or no energy for any affirmative action to focus on economic growth and development.
This loss of moral face by the government also emboldened the opposition both inside and outside Parliament to disrupt whatever feeble moves the embattled government made from time to time to stem the rot or push for some reforms.With the General elections looming large over the horizon, and the prospect of a near certain electoral defeat staring them in the face, the government, and with it,the domestic economy, started resembling a sick man in the throes of his death bed
This is how the corruption caused policy paralysis, leading to total lack of either preventive measures or pro active actions from the government, and the economic downturn was the inevitable fall out of this loss of governmental authority and credibility.
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