The Report Card of NDA

The Bharatiya Janata Party's poster boy and Gujarat CM Narendra Modi recently claimed that growth during the NDA rule was greater than the UPA, claiming it to be 8.2 %. Though the BJP and its leaders have a habit of saying a lot of things without doing their homework well, after all its Deputy Leader of Opposition in Rajya Sabha, Ravi Shankar Prasad doesn't even know how many total constituencies are there in his home state of Bihar, such a big blunder can prove to be too silly. To analyse and look into the matter, I thought just like I wrote the Report Card of its PM candidate Narendra Modi, why not make a Report Card of the NDA rule from 1998-2003 too. After all they call it the golden era in the political history of modern India. Let's have a fact checking to see if all that glitters is gold or not.

In order to assess the performance of the NDA Government in terms of various economic growth indicators, we look at two periods: the six-year period preceding April 1, 1998, and the six-year period after April 1, 1998. For convenience, we will refer to these as Period 1 and Period 2. This allows us to assess the performance of the NDA Government (Period 2) compared to its immediate predecessors in the form of the United Front and Congress-led governments (Period 1).

It is obvious that by both measures, growth of national income decelerated quite substantially in Period 2, that is, under the NDA Government. In fact, the period from April 1998 until March 2003 appears to have experienced a deceleration of growth compared to the earlier 15-year period as well. Growth of agricultural production was actually negative during this period, mainly because of the drought-induced collapse in production in 2003. Indeed, the apparently fabulous recovery during 2004, which has been cited so much in government and ruling party handouts, is essentially nothing more than the reflection of the recovery of agriculture consequent upon a very good monsoon. That brought home the unfortunate reality that the Indian economy was still heavily dependent upon the monsoon, which could create major changes not only in agricultural output but also in aggregate economic activity.

This was despite the much increased external openness of the economy, which has now been exposed to international trade and capital flows more than ever before. It also undoes some of the claims made by the votaries of such policies, that economic liberalisation had unleashed such animal spirits in the economy that agriculture was no longer of macroeconomic significance and that the growth impetus of the economy is no longer affected by it.

Even in industrial production, the slowdown of the second period is very marked. It indicated a sharp deceleration of the index of industrial production, by both trend and compound rates of growth. This cannot be blamed on the year of 2003 alone; the entire six-year period indicated sluggish expansion of industrial output. Why has this happened? Some clues can be gleaned from the pattern of aggregate investment, in terms of the rates of growth of real gross domestic capital formation. Such investment increased at a reasonable rate in the earlier period, above 9 per cent per annum in real terms. However, in the second period (the tenure of the NDA regime) the increase in investment had slumped to only around 5 per cent per annum.

Even this low rate of increase is of dubious significance, since both public and private corporate investment stagnated or even declined over this latter period. Indeed, such increase in capital formation as did occur after 1998 came about mainly because of household sector capital formation. This is determined in the national accounts as a residual, and essentially reflects increases in domestic construction activity.

Investment declined because public investment has stagnated or declined under the NDA regime. Despite the recent promises of national highway expansion and other such indicators of material prosperity, the NDA Government has spent less (in real per capita terms) on productive investment for infrastructure and economic growth, than any government in independent India. It is well known that in India, as in almost all other developing countries, there are strong positive linkages between public and private investment. Typically, high rates of public investment call forth and enable more private investment activity.

However, the policymakers of the NDA appeared to believe that they could further reduce the amount of productive public expenditure and expect private entrepreneurs to take up the slack and increase aggregate investment. Obviously, this was not likely to happen in the absence of any other major positive stimulus. So it is not surprising that the NDA's tenure has been associated with lower rates of growth of industrial production and economic activity generally, than the preceding period. Indeed, the bulk of economic activity over this period did not show much acceleration, certainly when compared to the earlier period. This is in conformity with other indicators such as employment generation, especially in the organised sectors, which also indicate stagnation or insufficient expansion. So the official figures suggest that, whatever else the BJP might claim to be the NDA's strengths, successful macroeconomic management is not among them.

This is evident in the slack that remains in the economy in the form of high unemployment and underemployment, wasteful build-up of reserves through allowing unnecessary capital inflows that are not being productively used, and of course through the appalling waste of public food stocks that were exported away at below BPL prices when hundreds of millions within the country remained hungry. But it is even apparent in the aggregate growth performance, which unfortunately has not been anywhere near as impressive as the current BJP PM candidate's propaganda would have us believe. However thrashing their claims, official data of the World Bank shows that the average GDP growth during the ten years of UPA rule is 8.2 % while that of the NDA is merely 5.4%.

That was about the economy and condition of the country during the NDA rule. Who can forget the disastrous India Shining campaign led by the BJP during the 2004 general elections which projected India touching the zenith of growth and development while millions were starving and the country's youth furious because of high levels of unemployment. The NDA also claims to have built more roads or highways than the UPA. Yet again, official data suggests, that the NHAI under the NDA built 2455 kms of roads where as under the UPA rule, it is 17195 kms and counting. Under the NDA rule, poor were heavily neglected and there were hardly any social welfare schemes that I can think of that initiated by the NDA. While during the UPA rule, the country got NREGA, MNREGA, Farmers Loan Waivers, Right to Education, Food Security and the most recent Land Acquisition Act which will be of immense help to the farmers.

Another big blot of the BJP led NDA government is the communalization of education in India.  In 2002, under the NDA government spearheaded by the Bharatiya Janata Party (BJP) the government made an attempt at changing the NCERT school textbooks through a new National Curriculum Framework. Marxist historians raised objections to the new curriculum, claiming "saffronization" of education by allegedly raising the profile of Hindu cultural norms, views and historical personalities in school textbooks. The BJP opined that their only goal was to promote sectarianism, but present a more accurate picture of Indian history and Indian culture (such as Vedic science), which was being downplayed by the left wing ideologues. The NDA was defeated in the elections of 2004 and the new UPA government pledged to "de-saffronize" textbooks and curricula nationwide and restore the secular character of education. In March, the UPA Government released new NCERT textbooks, based on the texts used before the controversial 2002 updates. The Ministry of Human Resource Development, which oversaw this project, stated that it had made only minor modifications to the books that predated the "saffronized" era. In Delhi, the Directorate of Education, in collaboration with the State Council of Educational Research and Training, prepared 47 new textbooks, and other state governments were expected to do likewise.

And last but not the least, if you think that the NDA rule was free from scams, then you're very wrong. Let us have a look at the scams which happened under the NDA rule.

Tehelka.com, a website run by investigative journalism enthusiast showed BJP’s then president Bangaru Laxman taking bundles of cash as bribe. UTI – United Trust of India, now doing business as Axis Bank, lost its money putting investors to the verge of loosing their money.  Though the funds was managed well in UTI64, scam  hit during NDA regime which created the loss. Few thousand crore money involved.  The US-64 scheme had 2 crore investors, the bulk of whom were small savers, retired people, widows and pensioners. In 1998, the UTI crashed, and the BJP-led NDA government scrambled to organise Rs. 3,500 crore bail-outs to UTI.  The capital of UTI fell by 33% from 75,000 crores to 50,000 crores, making this a 25,000 crores scam. Additionally public faith in financial institutions was completely eroded. In a global recession such a mistake proved be catastrophic, retarded and hamper the country’s chances of recovery turning it into a full blown crisis.

BJP leader Sushma Swaraj and her close friendship with Reddy brothers, who are considered to be mining mafia in Andhra – Karnataka states is a known fact.  She was considered as Godmother for Reddy brothers.
Soon after assuming office in 1999, the NDA government embarked on a full-scale privatisation programme, offering controlling stake in government-owned companies to “strategic partners”. Starting in January 2000, in less than two and a half years, the government sold controlling stake in nine companies, apart from 19 hotels at various locations belonging to the India Tourism Development Corporation (ITDC). The government earned Rs.5,544 crores from the strategic sale of the nine enterprises. Every single instance was controversial and initiated protests from the unions. The unions not only feared for workers’ jobs but alleged that the units were being sold for a song.

Another one is the BALCO SCAM: – Complete erosion of public money in the name of ‘disinvestment’. – The aluminium giant where missiles such as ‘Agni’ and ‘Prithvi’ were shaped, was sold to Sterlite company for a paltry sum of Rs.551 crore at a time when the assets alone were worth Rs.5,000-6,000 crore. Giving tough compitition to it in terms of its magnitude could be the Gujarat Cooperative Bank Scam 2003: – In Gujarat, the Narendra Modi Government had to pay out Rs. 870 Crore to small investors after the Gujarat Bank Scam of 2003 which led to the closure of 9 cooperative banks and 17 other being declared sick.  – The administrator of the crisis-ridden Panchamahal District Co-operative Bank even registered a complaint against Gujarat Minister of State Prabhatsinh Chauhan and 28 others, alleging their involvement in the embezzlement of Rs 124 crore (Rs 1.24 billion) from the bank.

These were just a few instances of mismanagement and misgovernance during the NDA rule which proves that under their reign both the Indian economy as well as the cultural fabric of the country were in the doldrums. There are plentiful more issues to further reiterate this point which due to the length constraint couldn't be mentioned here. After all, one the worst riots of modern India happened in 2002 in Gujarat during the NDA rule and that too under a BJP led government in the state and yet they didn't do anything to curb the brutal killing of thousands of innocents. Today after so many years when the BJP claims to give the only stable alternative to the current ruling government, the bigger question is whether they're capable of doing it or not. Just showing a show of unity at a Bhopal rally among their own party doesnot qualify them to stake a claim at the Centre but an effort to take the country forward together will. Unfortunately, their politics is not inclusive but divisive. They talk about war and not peace. And above all, history bears testimony that they've always been pro-mill owners and never pro-poor. So the choice is now yours.

For all sorts of bouquets and brickbats feel free to leave a comment below or mail me at author.vish94@gmail.com