The emerging of the UPA government in India Essay

The UPA was formed shortly after the 2004 general elections after it became clear that the old opinion alliance, the National Democratic Alliance ( NDA ) had been defeated. The NDA has won merely 169 MPs in the 543 member 14th Lok Sabha, as opposed the UPA run of 222 seats. The Left Front with 59 MPs ( excepting the talker ) , the Samajwadi Party with 39 MPs and the Bahujan Samaj Party with 19 Mononuclear phagocyte systems were other important blocks that opted to back up UPA at assorted stages of its regulation. The UPA did non bask a simple bulk on its ain in the parliament, instead it has relied on the external support to guarantee that it enjoys the assurance of the Indian parliament similar to the expression adopted by the old minority authoritiess of the United Front, the NDA, the Congress authorities of Narasimha Rao, and earlier authoritiess of V P Singh and Chandrashekhar.

An informal confederation had existed prior to the elections as several of the current component parties had developed seat-sharing understandings in many provinces. However, it was merely after the election that the consequences of dialogues between parties were announced. The UPA authorities ‘s policies were ab initio guided by a common minimal programme that the confederation hammered out with fruitful audiences with Jyoti Basu and Harkishan Singh Surjeet of the 59 member Left Front. Hence, authorities policies were by and large perceived as center-left, reflecting the middle-of-the-road policies of the INC. The Congress party is today more closely aligned with the neoliberalism, strongly advocates societal democracy and societal liberalism. During the term of office of Jharkhand CM Madhu Koda, the components of the UPA were, by common consent, back uping his authorities. At present the UPA is no longer supported by the Left parties. It survived a ballot of assurance in the parliament on 22 July 2008.

In the Indian General Election in 2009, the UPA won a convincing 262 seats with INC entirely winning 206 seats. The UPA is now all set to organize a stable bulk authorities crushing an anti-incumbency factor. All inclusive and populist policies along with a younger leading have been credited for this. UPA won the general elections with the Congress winning 206 seats, 61 seats more than the 2004 election tally. The pre-poll alliance of UPA, which did non include Lalu Yadav ‘s RJD, Ram Vilas Paswan ‘s LJP and Mulayam Singh Yadav ‘s SP, won 262 seats, and needed the support of 10 MPs to acquire a simple bulk in the Lok Sabha. Manmohan Singh continued to be the Prime Minister and in making so became merely the 2nd Prime Mnister of India after Jawahar Lal Nehru to return to power after a full five twelvemonth term in office. RJD, SP, BSP, JD ( S ) and other smaller parties and mugwumps provide external support to the authorities.


The United Progressive Alliance came into being in May 2004 to interpret the authorization of the people of India expressed through the General Elections of 2004 into a new docket of administration aimed at supplying a responsible, antiphonal, caring and inclusive Government. The UPA, and its protagonists, pledged themselves to continue, protect and advance societal harmoniousness and to implement the jurisprudence without fright or favor to cover with all obscurantist and fundamentalist elements who seek to upset societal cordiality and peace. They expressed their committedness to guarantee that the economic system grows at least 7-8 % per twelvemonth in a sustained mode over a decennary and more and in a mode that generates employment so that each household is assured of a safe and a feasible support. The UPA besides committed itself to heighten the public assistance and wellbeing of husbandmans, farm labor and workers, peculiarly those in the unorganised sector and guarantee a secure hereafter for their households in every regard. The UPA expressed its committedness to authorise adult females, politically, educationally, economically and lawfully ; and, to supply for full equality of chance, peculiarly in instruction and employment for scheduled castes, scheduled folks, other backward categories and spiritual minorities. Finally, the UPA and its protagonists besides gave their grave committedness to unleash the originative energies of our enterprisers, business communities, scientists, applied scientists and all other professionals and productive forces of society, while supplying a corruption-free, crystalline and accountable authorities.

The UPA is committed to supporting and advancing the thoughts and ideals that define our democracy and organize the footing of our democratic and secular fundamental law. The UPA believes that our State was built on the foundations of a deep and staying committedness to the values of broad, societal democracy. Pluralism, secularism, multi-cultureless and the rules of equity, societal justness and the regulation of jurisprudence are core values of our civilisation and the bedrock of our Republic. The UPA Government is proud of the fact that it has delivered well on its committednesss within a brief span of 19 months in office. Never before has a Government fulfilled so many of its declared committednesss within such a brief span of clip. This Report on Implementation presents a comprehensive reappraisal of action taken by assorted ministries of the Cardinal Government and by the Prime Minister ‘s Office in implementing the NCMP. An of import part of the UPA to the life of our citizens that can non be listed as a programme or a policy, and can non be quantified in statistical footings is the new sense of security and wellbeing imparted to the weaker subdivisions of our society, particularly scheduled caste and scheduled folks, adult females and spiritual minorities. The UPA Government has assiduously worked to make a more inclusive society, a more caring civil order and a more just economic system. While prolonging a rate of growing of over seven per cent, the Government has been able to keep the monetary value line, despite tremendous force per unit area exerted by the high planetary oil monetary values. This is a signal accomplishment of sound macro-economic direction. Continued economic growing and prudent financial direction will enable the Government to mobilise the needed resources to finance the many enterprises taken during the twelvemonth, particularly the employment warrant programme and new investing in instruction, wellness and rural substructure.

Apart from the implementing all the enterprises listed in the NCMP, the Government has besides launched new enterprises, most significantly, Bharat Nirman. These enterprises have the potency to transform India. However, effectual execution of the Government ‘s programmes requires difficult work, particularly at the grassroots degree. Raising public consciousness and supervising execution of Government programmes is the grave responsibility of concerned citizens and political workers. Members of civil society must play an active function in guaranting proper execution of Government policies.


The Emergence of Planing

1938 – National Planning Committee.

Congress President – S. C Bose

Chairman – Jawaharlal Nehru

Current – president and deputy president? ? ? ?

1944 – Mumbai Plan:

A bluish print for economic development after independency

Worked out by 8 Top industrialists

1950: Constitution of Planning Commission

Main Task were to do an appraisal of stuff & A ; capital

Effective use of the resources

The Planning Commission

The Commission comprises 8 members

Prime Minister – Chairman

4 full clip members ( including deputy president

Minister of Planning

Minister of Finance

Minister of Defense

History of Economic Planning in India

1947 – 1950: Preparatory stage in be aftering & A ; development

1950 -1960: Rapid Industrialization

1960 – 1970: Focus on Agricultural

1980 – 1991: Liberalization

1991 to now: LPG

Objective of Planing in India

Attainment of higher rate of economic growing

Decrease of economic inequalities – fifth program “ garibi hatao ”

Achieving full employment

Achieving economic ego trust

Modernization of assorted sectors – agribusiness

Righting instabilities in the economic system

Inclusive growing

Upgradation of engineering

Modernization of industries

Increase literacy rate for individuals of age 7 old ages or more to 85 %

Aims of 11th five twelvemonth program

Reduce dropout rates of kids from simple school from 52.2 % in 2003-04 to 20 % by 2011-12

Lower gender spread in literacy to 10 per centum points

Provide clean imbibing H2O for all by 2009 and guarantee that there are no slip-backs

Raise the sex ratio for age group 0-6 to 935 by 2011-12 and to 950 by 2016-17

Promotion of industrial growing and investing

Increase agricultural GDP growing to 4 % per twelvemonth to guarantee a wider spread of benefits.

Make 70 million new work chances.

Augment minimal criterions of instruction in primary school.

Reduce infant mortality rate to 28 and malnutrition among kids of age group 0-3 to half of its present degree.

Ensure electricity connexion to all small towns and increase wood and corner screen by five per centum points.


Economic Revival

Economic growing: –

The Indian economic system grew at an mean one-year rate of 9.5 per cent during 2005-06 to 2007-08. Following the planetary fiscal crisis, the growing of the Indian economic system slowed down to a degree of 6.7 per cent during 2008-09. The twelvemonth, 2009-10, showed clear marks of recovery with the rate of growing being estimated at 7.2 per cent. This has occurred, despite a diminution of 0.2 per centum in agricultural end product on history of subnormal monsoons. The recovery has been marked by renewed impulse in the fabrication sector, which grew by 8.9 per cent in 2009-10, compared to 3.2 per cent in 2008-09.

Industrial growing, investing and fiscal markets: –

The UPA Government has taken a figure of financial and programme steps to better the fight of Indian industry. Its Successful macroeconomic direction coupled with the policy enterprises have re-energised domestic endeavor to high degrees of growing despite high energy and trade good monetary values, although in recent months at that place has been some downswing due to lag in the universe economic system and demand for our exports. Simultaneously, the UPA Government has shown that where there is a will the operation of the populace sector system can be improved. It has ensured a turnaround in the public presentation of public sector endeavors, which have shown a healthy growing. Revival bundles have been approved for more than 25 ill and loss-making companies, several of which have been restored to profitableness.

Public sector endeavors: –

The UPA Government has achieved a turnaround in the public presentation of public sector projects, with the public presentation bettering systematically in footings of entire turnover and profitableness. The profitableness of public sector steel companies has gone up threefold in three old ages to Rs. 15,567 crore in 2006-07.

Tax reform: –

The UPA Government has shown in the last four old ages how revenue enhancement grosss can go floaty while cut downing revenue enhancement rates, with gross revenue enhancement grosss turning by 20 % to 25 % yearly over the last four old ages and the tax-GDP ratio lifting from 9.2 % in 2003-04 to 12.5 % in 2007-08.

Investing clime: –

Entire foreign institutional investing in the 3year period from April 2004 boulder clay December 2007 was more than 1 times that in the 12 predating fiscal old ages taken together. FDI influxs have taken off with capital flows making a high of over 5 % of GDP. The globalization of Indian endeavors and planting of the seeds for the creative activity of the Indian multinationals have taken topographic point in the last few old ages.

Corporate Personal businesss: –

The e-governance undertaking MCA21 has brought important alteration for concerns, stockholders and investors, professionals, Bankss and fiscal establishments, and employees by doing all minutess Internet enabled.

A measure for ordaining a new statute law that would enable the puting up of a new signifier of organic structure corporate, viz. , Limited Liability Partnership ( LLP ) , is ready for debut in Parliament. It will supply an ideal vehicle for the growing of professionals and the cognition sector in an organized mode and supply new chances for the growing of the service sector.

To supply required instruction and make consciousness among investors, investor consciousness cantonments have been held and an Investor Education and Protection Fund, a website register of economic defaulters indicted for economic offenses, and an effectual web site to right investor grudges have been created.

Export-related industries: –

By end-March 2008, the Particular Economic Zones promoted by Government have provided direct employment to over 180,000 individuals, with indirect employment estimated at twice every bit much. They have attracted investing of over Rs. 67,000 crore, and generated exports of over Rs. 64,000 crore during 2007-08. A humane and broad rehabilitation policy has been put in topographic point to turn to concerns sing individuals displaced.

Relief steps for exporters: –

There has been a important impact on the export due to unprecedented grasp of the Rupee against the US $ over the past twelvemonth. Sing the earnestness of the state of affairs, the UPA Government has taken a figure of steps to supply alleviation to the exporting community. The alleviation steps include sweetening in the Duty Entitlement Pass Book / responsibility drawback rates, proviso of involvement subvention for pre- and post-shipment recognition, exemption/refund of service revenue enhancement in regard of certain services, decrease in export recognition warrant premium, etc. The cost of alleviation given to exporter sum over Rs. 8,000 crore.

IT package and services: –

The IT package and services exports from India grew more than threefold over the last four old ages, supplying employment to an extra 12 hundred thousand educated youth straight and another eight million indirectly.

Income Tax freedom available under the Software Technology Parks Scheme has been extended till March 2010. A measure to amend the Information Technology Act has been introduced to consequence commissariats that will guarantee abroad clients sing adequateness of informations protection Torahs.

A figure of enterprises have been taken in close concert with the industry for run intoing human resource demands, greater entree to foreign markets, etc. A strategy has been approved for puting up Information Technology Investment Regions.

Electronicss, IT Hardware and Telecom Equipment Fabrication: –

The UPA Government has launched a Particular Incentive Package Scheme to pull investings for puting up semiconducting material fiction and other micro and nanotechnology fabrication endeavors in India. In response, proposals for investing to the melody of over Rs. 60,000 crore have been received


Several financial and other steps have been taken to advance the electronics and IT hardware sector, including blessing of a strategy for puting up Information Technology Investment Regions and rectification of cases of upside-down responsibility construction.

The growing possible and pro-active function of the Government has brought major telecom companies into the fabricating infinite of the state.


Coal: –

Over the last four old ages, 142 coal blocks with geological militias of about 37,000 million metric tons have been allocated, whereas merely 39 blocks with entire geological militias of 3,700 million metric tons were allocated earlier.

Power: –

The 11th Plan mark for extra power coevals capacity is 78,000 MW. Projects aggregating more than 60,000 MW of power coevals are under building. The UPA Government has taken assorted steps ; including allocation of coal blocks with 43 the capacity to back up 68,000 MW of power coevals. Nine sites have been identified in nine States for puting up coal-based Ultra Mega Power Projects ( UMPP ) with capacity of 4,000 MW each, and work has started on the Sasan and Mundhra undertakings.

New and renewable energy: –

The UPA Government has given greater focal point on renewable power during the past four old ages, with capacity add-on during this period being well more than that added during the predating 15-year period. Extra grid-interactive renewable power coevals capacity of about 6,500 MW was installed during the period, as against cumulative accomplishment of about 4,800 MW before.

Consequently, the state has emerged as a leader in Asia, and holds 4th rank worldwide in air current power. Under the Remote Village Electrification strategy, as against cumulative electrification of around 1,300 small towns by March 2004, around 2,100 small towns have been electrified since. National policies on bio-fuels and renewable energy are being finalized.


The 11th Plan purposes to raise the entire one-year investing in substructure from 5 % of GDP to 9 % . Public sector investing will go on to play an of import function in substructure development, supplemented by private investing wherever executable.

Committee on Infrastructure under the Prime Minister maneuvering substructure enterprises

Action program finalised for development of National Highways web, affecting entire investing of Rs. 1,75,000 crore over the following seven old ages

Plan outlay for roads has been more than doubled in merely three old ages

First airdromes being created with estimated entire investing of Rs. 40,000 ; Civil Aviation Policy on the anvil ; modernization and enlargement of Delhi and Mumbai airdromes begun ; Greenfield airports approved at Bangalore and Hyderabad ; modernisation of Kolkata, Chennai and regional airdromes under finalization ; revamp of Airports Authority of India being finalised

Action program for world-class ports through PPP to convey investing of Rs. 60,000 crore

Work on dedicated railroad cargo corridors along Mumbai-Delhi and Kolkata- Delhi routes with estimated investing of over Rs. 21,000 crore expected to get down in a twelvemonth

Private sector to be eligible for running container trains

Undertakings for puting undersea optical fiber overseas telegrams initiated by Central Telecom PSEs

Broadband Policy 2004 provides inducements for creative activity of substructure

USO Fund investings stepped up aggressively and to be used for rural nomadic telecom excessively

IIFCL to give long-run loans to substructure undertakings, including those with viability spread support, to turn to spreads in private sector funding of substructure

SEZ Act gives major inducements for substructure creative activity

Foreign POLICY

India has entered into strategic partnership with United States, Russia,

Japan and the EU

SAFTA came into force from January 1, 2006

Look East policy

Improved dealingss with neighbors

Abroad Citizenship strategy to cover all abroad Indians who emigrated after 26.1.50

Bill introduced in Parliament for grant of voting rights to NRIs

Integrated check-posts being planned along boundary lines with Bangladesh, Nepal and Pakistan

Srinagar-Muzaffarabad, Delhi-Lahore, Amritsar-Lahore and Amritsar-Nankana Sahib coach services and Khokrapar-Munnabao rail service across Indo-Pak boundary line / Loc made operational

Infrastructure at Wagah / Attari being upgraded


Trade and Economic Relations Committee under the Prime Minister enabling decision-making on trade and investing issues

Number of steps taken for trade facilitation


FM wireless coverage increased manifold through licences given under new policy for 243 channels in 29 metropoliss, from merely 21 private FM wireless Stationss licensed earlier in 12 metropoliss

Bill introduced to develop and modulate options and trade good derived functions market

Corporatisation and Demutualisation Schemes of 19 stock exchanges notified

POTA repealed

A figure of steps taken for public assistance of functioning and veterans

Benefits under strategy of pension for freedom combatants enhanced

Senior Citizens Savings Scheme launched with attractive involvement rate

Tamil declared a classical linguistic communication First desalinization works announced for Chennai

Five Old ages of UPA

Bluffing the Aam Admi: –

The UPA Government came to power in 2004 siting on the choler of the people against the communal and neo-liberal policies of the NDA Government. The UPA Government after coming to power declared that it will provide to the aam admi by adhering to the National Common Minimum Program ( NCMP ) . The NCMP as a papers was a via media of kinds with neo-liberal economic policies pursued in India, while non doing a complete interruption from neo-liberal policy devising. However, the last 5 old ages have proved that a leopard does non alter its musca volitanss and the Congress led UPA Government was wholly committed to the neo-liberal policy government and did really small for the upliftment of the aam admi.

Adhering to Neo-Liberalism: FRBM Act and Declining Fiscal Deficit

Neo-liberalism entails an economic doctrine where the province rescinds its function of providing to the involvements of the people under its legal power and transforms itself into an instrument of advancing the involvements of planetary finance capital. This basically at the policy degree takes the signifier of an outgo cut on the portion of the province under the diktats of finance capital. In our state this outgo cut has been given a legal position under the Fiscal Responsibility and Budget Management ( FRBM ) Act, which limits the financial shortage ( difference between Government ‘s outgo and revenue enhancements ) to merely 3 % of GDP. This Act was passed by the NDA Government but the UPA Government excessively with its basic push in favor of neo-liberalism embraced it. As a consequence, during the UPA government, the financial shortage continued to worsen from 4.5 % in 2003-04 to 2.7 % in 2007-08. In 2008-09 as a consequence of the fiscal crisis and gross shortage of the Government increasing, the financial shortage has shot up to 6 % of GDP, which nevertheless is estimated to go on its worsening tendency from following twelvemonth, with a committedness that the FRBM marks will be adhered to in the close hereafter. ( Budget Speech of Finance Minister, 2009-10 ) .

Worsening Development Outgo

This worsening financial shortage basically means a diminution in the outgo of the Government. Now, within this outgo of the Government, there are fixed outgos like wages and rewards to the Government employees, ( which has increased late due to the 6th wage committee ) , involvement payments and administrative costs of the Government. So if the Government decides to diminish its outgo so this basically means, given the fixed portion of its disbursals, a diminution in the Government ‘s development outgo. Therefore, it is non surprising that the outgo of the UPA Government as a proportion of GDP, has really declined from 7.09 % in 2003-04 to 6.17 % in 2006-07 and so marginally increased to 6.76 % in 2007-08. ( Handbook of Statistics on the Indian Economy, RBI ) In other words, as a consequence of the basic attachment of the UPA Government to the policies of neo-liberalism, it has really decreased the outgo on development, as a proportion to GDP, which is most of import for the aam admi. This worsening outgo on development has taken a immense toll, peculiarly, on instruction and wellness in India.

Outgo on Education and Health: A Far Cry from NCMP


Increasing Public disbursement on instruction to at least 6 % of GDP was a cardinal committedness made bb12020.2 crore, which has decreased to Rs 11933 crore in the interim budget of 2009-10. This fact entirely speaks volume about the UPA Government ‘s committedness towards universalising instruction in the state.

In the face of this refusal by the Government to increase outgo on instruction, what has happened is that private participants have come in a large manner in the instruction sector both in Primary every bit good as Higher instruction. The portion of private unaided higher instruction establishments increased from 42.6 % in 2001 to 63.21 % in 2006. ( Beginning: Eleven Five Year Plan, Vol. 2 ) . The UPA Government has declined from ordaining any statute law to command the fees and admittances in the private instruction sector. Therefore, what has basically happened is that far from passing 6 % of GDP in instruction, the UPA Government has decreased the outgo and catered to the involvements of private instruction suppliers, who are anything but the aam admi?


The aam admi in India is fundamentally unhealthy because of the complete apathy on the portion of the Government to increase allotment in the wellness sector. Harmonizing to the National Family Health Survey ( NFHS ) -3,

46 % of kids below 3 old ages of age were under weight

Percentage of anaemic kids between 6-35 months increased to 79.2 % in 2005-06, from 74.2 in 1996-97. Percentage of anaemic married adult females increased to 56.2 % in 2005-06, from 51.8 in 1996-97. Percentage of pregnant adult females who were anaemic increased to 57.9 % in 2005-06, from 49.7 % in 1996-97. In other words, there has been a drastic addition in anaemic individuals in the population.

This reflects a lessening in the nutritionary consumptions of the population. In 2004-05, the mean calorie consumption in rural and urban countries was 2047 and 2020 Kcal severally, which decreased from 2153 and 2071 Kcal severally.

In the face of such glowering lacks in the wellness of the population, it was imperative that the Government increase its outgo on wellness significantly to at least 2-3 % of GDP, as promised in the NCMP. However, it is seen that the outgo on wellness in the state was merely 1.02 % of GDP with the Centre lending merely 0.34 % of GDP. Such low degree of public outgo on GDP is amongst the lowest in the universe. As a consequence of this abysmal degree of public outgo on instruction, the figure of working Primary Health Care centres in the state decreased from 22842 in 2001 to 22370 in 2007. Percentage of vacant physician stations in the Primary Health Centre has besides increased from 13.36 % in 2001 to 18.04 % in 2007. ( Beginning: How the UPA Spend Our Money, CBGA ) . In other words, under the UPA Government the aam admi could happen less figure of primary wellness attention Centres in his/her locality and even when s/he could happen one, the chance of non happening a physician in the wellness Centre really increased.


One of the chief grounds for the licking of the NDA Government in 2004 was the acute agricultural crisis in the state. In the NCMP, the UPA Government promised to better the agricultural state of affairs in the state. The world after five old ages is nevertheless far from what the UPA Government promised.

Large figure of husbandmans continued to perpetrate self-destructions even after the UPA came to power. In the twelvemonth 2006, 17060 husbandmans committed self-destruction which was somewhat lower than 17131 husbandmans who committed self-destruction in 2005. In 2007, every bit many as 16632 husbandmans committed self-destruction. ( Beginning: hypertext transfer protocol: // ) . The husbandmans perpetrating self-destruction in such big Numberss merely show that the extent of agricultural crisis did non lessen with the UPA coming to power.

In order to turn to this issue of turning agricultural hurt and husbandmans ‘ self-destruction, the Government in the budget of 2008-09 proclaimed debt waiver strategy for the husbandmans. While the debt release came excessively late, it had its ain jobs besides. First, there was no strategy announced to relinquish the loans of the husbandmans taken from private money loaners which constitute majority of the loans of the husbandmans. Second, the unvarying cut-off of two hectares discriminated against dry land, as against wetland, husbandmans since the secret plan sizes of dry land husbandmans are relatively larger ; so this unvarying cut-off may even go forth out big sections of the peasantry in crisis-hit parts like Vidarbha.

At the same clip, there are other serious issues refering to agriculture in footings of a falling per capita handiness of nutrient grains. It is notable that the per capita handiness of nutrient grains continued to worsen under the UPA Government from 168.9 Kg per capita per annum in 2004 to 160.4 Kg per capita per annum in 2007. This is fundamentally a contemplation of turning job of nutrient security in the state which has been compounded by the reluctance of the UPA to universalise the Public Distribution System. Furthermore, the entire allotment on nutrient security decreased from 1.16 % of GDP in 2004-05 to 1.12 % in 2008-09. ( Beginning: How the UPA Spend Our Money, CBGA ) . All this points to the fact that under the UPA, it has become hard for the population to entree nutrient in the state. This is so a farce of the UPA committedness towards bettering the conditions of the aam admi.

Price Rise

After many old ages, the state reeled under dual digit rising prices rate under the UPA Government. This rising prices was a consequence of the denial of the UPA to come out of the neo-liberal paradigm and beef up the Public Distribution System and prohibition hereafters trading in indispensable trade goods. Furthermore, the UPA ‘s obstinate refusal to cut the excise responsibilities on crude oil merchandises besides increased the monetary value of gasoline and Diesel in the state. The sky rocketing monetary value rise has subsided now, merely with the coming of recessive tendencies in the Indian economic system as a consequence of the planetary economic crisis.

Denial Mode on Economic Crisis

Ever since the economic crisis hit the universe and India, the UPA Government has been on a denial manner. First, they claimed that India was insulated from the crisis, which was wholly false as the information of the Indian economic system showed the at hand decelerate down and occupation losingss in the economic system. Even so, the basic policy push of the UPA continued to be neo-liberal and market oriented when the full universe, peculiarly the advanced capitalist states, were falling back upon public investing and Keynesian steps to change by reversal the planetary recessive tendency. This is most apparent in the fact that the UPA Government announced its determination of increasing the FDI ceiling in the insurance sector when the full universe was in a fiscal crisis, which spread exactly because of such policies aimed at opening up the fiscal sector.

Second, the response of the UPA Government to cover with the crisis is grossly unequal. The basic push of the UPA has been in footings of denoting revenue enhancement cuts and involvement rate cuts in the economic system aimed at enticing the people to pass more thereby increasing demand. However, in times of recession when the assurance on the economic system is low, such revenue enhancement and involvement rate cuts does non increase demand, merely because the public clasp on to their hard currency balances and do non pass more in expectancy of an unsure and black hereafter. What was needed was direct investing and demand injection on the portion of the Government. In this respect the UPA merely announced a direct financial stimulation which was merely 0.5 % of India ‘s GDP, which was a paltry amount compared to the outrageousness of the crisis. As a consequence of the UPA ‘s reluctance to cover with the crisis, hundred thousand of people have lost their occupations and many had to endure wage cuts. In other words, the ideological committedness of the UPA towards neo-liberalism continues while the aam admi suffers.

Left and the UPA

The UPA Government was supported by the Left parties for about 4 and half old ages after which the support was withdrawn chiefly on the issue of the Indo-US Nuclear Deal. During this clip, it was the Left which systematically opposed the neo-liberal policies of the Government. It is because of the Left that the Disinvestment Ministry was dissolved, denationalization of net income devising PSUs was stopped, Capital Account Convertibility was non allowed, raising of FDI ceiling on insurance, banking etc was non allowed, which were all aimed at bring downing farther wretchedness on the common adult male. At the same clip the Left besides pressurized the UPA to denote some pro-people statute law in the signifier of the RTI Act, NREGA Act, and Forests ‘Dwellers ‘ Act etc. In other words, the Left played the function of the lookout of the common adult male while back uping the UPA Government to maintain the communal BJP out of power.


Economic Outlook for 2010-11

Economy to turn at 8.5 per cent in 2010-11 and 9.0 % in 2011-12

Agribusiness grew at 0.2 % in 2009-10. Projected to turn at 4.5 % in 2010-11 and 4.0 % in 2011-12.

Industry grew at 9.3 % in 2009-10. Projected to turn at 9.7 % in 2010-11 and 10.3 % in 2011-12.

Servicess grew at 8.5 % in 2009-10. Projected to turn at 8.9 % in 2010-11 and 9.8 % in 2011-12.

Slow recovery in planetary economic and fiscal state of affairs

Rising domestic Savingss and Investment main engines of growing

Investing rate is expected to be 37 % in 2010-11 and 38.4 % in 2011-12.

Domestic nest eggs rate is expected to be over 34 % in 2010-11 and shut to 36 % in 2011-12.

Current Account shortage estimated at 2.7 % of GDP in 2010-11 and 2.9 % of GDP in 2011-12

Merchandise trade shortage projected to be $ 137.8 billion or 9 % of the GDP in 2010-11 and $ 160 billion or 9.3 % of GDP in 2011-12.

Invisibles trade excess projected to be $ 96 billion or 6.3 % of the GDP in 2010-11 and $ 109.7 billion or 6.4 % in 2011-12.

Capital Flows can be readily absorbed by financing demands of the high growing of the Indian Economy.

Against the degree of $ 53.6 billion in 2009-10, the capital influxs projected to be $ 73 billion for 2010-11 and $ 91 billion for 2011-12.

Accretion to militias was $ 13.4 billion in 2009-10. Projected to be $ 30.9 billion in 2010-11 and $ 39.8 billion in 2011-12.

Inflation rate projected at 6.5 % by March 2011 due to expected normal monsoon combined with the base consequence.

The probationary headline rising prices was above 10 % in June 2010.

Controling high rising prices rate indispensable for sustainable growing in average term.

Available nutrient stocks must be released to hold a dampening consequence on monetary values.

Monetary Policy to finish the procedure of issue and operate with prejudice toward fastening.

Recognition off return picked up. Strong growing rate in the first one-fourth of 2010-11.

Fund flow from capital market to commercial sector rather strong. Chemical bond issue growing comparatively higher than issue of equity.

Liquid conditions are tight plenty for pecuniary policy signals to be suitably transmitted to the fiscal sector. A bias toward fastening is necessary.

Exchange rate fluctuations will stay within acceptable scope.

Exit from the expansionary financial policy non merely executable but besides necessary

High perkiness in direct and indirect revenue enhancement aggregations. Telecom auctions and decontrol of the crude oil merchandises monetary values to supply extra shock absorber.

Fiscal shortage output may be lower than the budgeted amalgamate financial shortage of 8.4 % of GDP for 2010-11.

Gross Deficit as a ratio of GDP expected to worsen from 6.3 % in 2009-10 to 4.6 % in 2010-11.

Operationalization of Goods and Services Tax ( GST ) should be a precedence.

Budgeted degree of Fiscal Deficit and Revenue Deficit still beyond comfort zone.

Need to apologize the nutrient and fertiliser subsidies.

To prolong a growing rate of 9.0 per cent, focal point is required on:

Incorporating rising prices

Bettering farm productiveness

Closing the big physical substructure shortage, particularly in the power sector

Advancement by UPA Government Year on Year

Year-on-year Growth Ratess









Agriculture & A ; allied activities









Mining & A ; Quarrying


















Electricity, Gas & A ; Water Supply


















Trade, Hotels, Transport, Storage & A ; Communication









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Community & A ; personal services









Gross Domestic Product at factor cost









Industry ( 2 + 3 + 4 + 5 )









Servicess ( 6 + 7 + 8 )









Non-agriculture ( 9 – 1 )









GDP ( factor cost ) per capita








Some Magnitudes


GDP at factor cost – 2004/05 monetary values in Rs hundred thousand crore ( or Trillion )









GDP market & A ; current monetary values in Rs hundred thousand crore ( or Trillion )









GDP market & A ; current monetary values in US $ Billion









Population in Million









GDP market monetary values per capita current monetary values









GDP market monetary values per capita in current US $








Analysis and Findingss of UPA Government

The National Common Minimum Programme of the UPA Government signified a via media of kinds ; while non doing a complete interruption from the neoliberal policies of the NDA government, it did assure to turn to their most inauspicious radioactive dusts, burgeoning unemployment and agricultural hurt. Besides the important outside support Lent by the Left Parties to the formation of a secular Government, which evidently left its imprint on the NCMP, what besides forced the innovators of neoliberalism who had seized the cardinal levers of the UPA Government to accept this societal public assistances programme, was the attuned political rhetoric of the election bound Congress Party led by Sonia Gandhi, which promised to better the life conditions of the aam admi. The economic doctrine underlying this via media was articulated by none other than the Prime Minister through the famed phrase: “ liberalisation with a human face ” . While the UPA Government had made its purpose to go on with the policies of liberalisation amply clear right from the clip its first Budget was presented by the Finance Minister in 2004, it has been hamstrung by the parliamentary strength of the Left Parties in its attempts to force through statute laws which seek to foster the neoliberal docket. Foremost illustrations are the stalled amendments to the Insurance Regulatory and Development Authority Act and the Banking Regulation Act and transition of the Pension Fund Regulatory and Development Authority Bill, which are all meant to speed up fiscal deregulating and let foreign Bankss, insurance companies and pension financess to come in the Indian markets in a large manner. Similar is the instance with the attempt to amend labour Torahs like the Industrial Disputes Act or Contractual Labor Act in order to present greater “ flexibleness ” in the labour market, which has met with stiff opposition.

However, the Government has gone in front full steam in conformity with the neoliberal docket, in countries where no Parliamentary blessing was necessary. These include stairss like opening up the Retail Trade, Warehousing, Mining and other sensitive sectors to foreign capital, heightening the FDI cap in the Telecom sector to 74 % , denationalization of the Delhi and Mumbai Airports and decrease in the EPF involvement rate. India already had a broad foreign investing government before the UPA government came into being. FDI was allowed upto 100 % in most sectors, with sectoral caps of 26, 49 or 74 % in a few sectors which are considered to be sensitive from the point of position of autonomy and national security.

The UPA Government ‘s continued attachment to the neoliberal policy model is farther testified by the current jubilation over the 8 % GDP growing rate registered in 2005-06 and the Sensex zooming past the 10,000 grade ( presently above 11000 ) , unmindful of the fact that the “ India Shining ” debacle of the NDA was based upon exactly the same deceptive indexs of economic well being, which miserably failed to convert the Indian electorate. The existent status of the multitudes is better reflected in the consequences of the sixtieth Round of National Sample Survey on Employment and Unemployment reported in the Economic Survey 2005-06: the unemployment rate between 1993-94 to 2004 for males increased from 5.6 % to 9 % in rural countries and from 6.7 % to 8.1 % in urban countries, and for females increased from 5.6 % to 9.3 % in rural countries and 10.5 % to 11.7 % in urban countries. Agribusiness, which employs over 55 % of the state ‘s work force, continues to stay in stagnations. The latest Economic Survey notes that agribusiness grew by 2.3 % in 2005-06 after 0.7 % growing registered in 2004-05, which implies that the growing rate for agribusiness during the full Tenth Plan period ( 2002-07 ) is non merely traveling to fall short of the targeted 4 % but may besides neglect to better upon the blue 2.1 % growing experienced during the Ninth Plan. Such a drawn-out period of low and volatile growing in agribusiness puts paid to the tall claims of faster GDP growing by the Citrus reticulatas of neoliberal reforms. The Finance Minister ‘s apparent success in cut downing the financial and gross shortage marks owes to an extent to some window-dressing. In the Budget 2005-06 there was significant “ off-loading ” of borrowing from the Union Budget to the State Government ‘s Budget, following the Twelfth Finance Commission ‘s study, to the melody of around Rs.29,000 crore.


The policies of the UPA Government led by the Congress party are clearly enmeshed within the overall contours of anti-people neo-liberalism profiting the rich at the cost of the aam admi. It is clip to get the better of the forces of neo-liberalism and mass meeting behind an alternate set of pro-people policies which can be provided merely by an alternate political formation led by the Left. The demand of the hr is to get the better of the communal BJP led NDA every bit good as the UPA and battle for a layman, democratic and pro-people political option to the BJP and the Congress. The economic policies of the UPA Government, far from being able to turn to the cardinal jobs of unemployment and the agricultural crisis, are adding new 1s for the Indian economic system. Disillusionment among the people whose aspirations were raised with the UPA ‘s coming to power, is fast turning into discontent. Those at the helm should recognize the gulf between the well being of the people and “ liberalisation ” , with or without a “ human face ” , and abandon such unsound schemes in favor of one which enables it to truly run into the pro-people committednesss made in the NCMP. Failure on the portion of the UPA authorities to convey about a class rectification would take to exactly the same destiny that consumed the NDA.