Due to mismanagement by the ruling UPA government, India's economy has returned to levels last seen in 1990 according to the article. The UPA squandered gains made after economic reforms in the 1990s, with high inflation, a weakening currency, falling exports, and a lack of new infrastructure and investment projects. As a result, India may face a forex crunch and economic instability in the lead up to the 2014 national elections, mirroring the economic crisis of the early 1990s. Gross mismanagement across key sectors such as power, coal, telecom and environmental clearances has stalled growth under the UPA's rule.

1. Thanks to
UPA’s
bungling,
economy is
back to where
it was in 1990
Original article: http://www.niticentral.com/2013/04/21/thanks-to-upa’s-bungling-
economy-is-back-to-where-it-was-in-1990-68631.html

2. Thanks to UPA’s bungling, economy is back to where it was in 1990, crown jakarta
capital management environmental
The Atal Behari Vajpayee Government bequeathed a robust economy to the
UPA. Remember that the growth rate registered in 2003-2004, the last year of the
NDA regime, was an impressive 8.5 per cent. Foreign exchange reserves were
plentiful. General prices were well under control. Share markets were booming.
And there was a general sense of well-being. Work on the Golden Quadrilateral
highway linking four corners of India was in full swing. And various public
infrastructure projects under the Public-Private- Partnership model were
proceeding without any hitch.
Now, in the last year of the UPA-II, we are back to the ‘Hindu rate of growth’. If
the economy logs anything above 5 per cent, it would be a miracle. The
prestigious highway project has become a casualty of the UPA Government’s
venality and drift. Instead of making 20 kilometres of new roads daily — as was
the case under the NDA — new construction has crawled to less than a kilometre
or two. So much so that a number of private concessionaires, after successful bids
have reneged on these projects. PPP model itself has been vitiated with collusive
post-tender benefits being given to concessionaires at the cost of the paying
public, be it the Delhi airport or numerous other projects, including the Build-
Operate-and-Transfer toll roads across the country.

3. Worse, consumer inflation is still in double digits. There is pressure on foreign exchange
reserves. Share markets are listless. Manufacturing sector is stuttering. After several
years of steady growth, the auto sector is staring at a demand slump. Worse, the rupee
has depreciated by over 25 per cent during the nine years of UPA.
In fact, the economic situation now mirrors the conditions back in the early 1990s when
India suffered the ignominy of pledging its gold with the Bank of England to ward off a
serious payments crisis. That would explain the recent peregrinations of Finance
Minister P Chidambaram, begging bowl in hand, through the major financial capitals
of the world.
With an alarming 6.7 per cent deficit on current account in the last quarter of 2012-13,
and the fear of the foreign financial institutions pulling out at short notice due to better
investment opportunities in Japan, the US and other Western countries, there is a real
threat that the country may yet again face a forex crunch, especially if the current
slide in exports continues unabated and there is no pick-up in domestic demand.
Thus far, the Finance Minister has tried to hard-sell India in London, New York, Toronto,
Hong Kong, Singapore, etc. However, the outcome has been less than enthusiastic.
Foreign investors foresee a period of instability and economic disarray ahead due to
the uncertain political conditions leading up to the May 2014 general election. Though
the sharp correction in the price of commodities and oil should ordinarily be good for
India, but the fall in the price of gold in the global market has also shaved off the value
of the gold reserves with the RBI.

4. Gross mismanagement is the main reason why the economy is in such doldrums.
Power sector is suffering for want of coal. Coal mining is under a cloud because of the
avoidable dogfight between the public sector behemoths, the NTPC and Coal India.
Coal scam under the benign Ministership of Manmohan Singh is now a matter of CBI
investigation which is being monitored by the Apex Court. A flourishing telecom sector
has come under pressure due to the lop-sided policy regime of the Telecom Ministry
and the telecom regulator. Fresh investment in scores of projects is stuck in the
Environment Ministry which applies no objective criterion for granting clearances. In
sum, the economic crisis is Minister-made.
Indeed, the economic situation has become so alarming that usually well-meaning
economic pundits have suggested that India should approach the International
Monetary Fund for opening a credit line just in case there is a sharp dip in the foreign
exchange reserves. Such a cushion would be reassuring for both domestic and foreign
investors. And might well prevent a further depreciation of the currency.
In sum, the economy is back to where it was in the early 1990s. Gains of the intervening
years have been squandered by the UPA-I and II. Corporate mood is sullen. The
ubiquitous aam admi is reeling under the weight of sky-high prices of essential goods.
Fresh investment in industry is on hold. There is a demand-recession in large sectors of
the economy. However, the lone sector which has registered a very high rate of
growth is the scam industry. New highs in political corruption were recorded in the last
nine years. It will be in the fitness of things if corruption becomes the calling card of the
UPA when it goes to the people for an electoral encore in May 2014.