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White Paper on Indian Economy 10 Questions and Answers

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Introduction

Government of India presented a white paper on Indian Economy on 9-Feb-24. It is 59 page long technical paper. If you want to know the gist of this in the form of key questions and answers then this article is for you. This article has 10 questions and answers which this paper has in detail. If you want to read the full paper you can use above link.

Question: What are the key headings of this paper?

Answer: The key headings from the white paper on the Indian economy include:

  1. An Overview
  2. Macroeconomic Situation in the Past Ten Years: Emerging Stronger from the Rubble
  3. From Fragile-Five to Top-Five in a Decade
  4. Indian Banking System: From Sickness to Health
  5. Rescuing, Recovering, and Rejuvenating the Economy
  6. Macroeconomic Fundamentals Taper 1 (2012-13)
  7. Macroeconomic Fundamentals Taper 2 (2021-22)
  8. Indian Economy’s Transition: A Decade of Transformation
  9. Challenges Faced and Reforms Undertaken
  10. Policy Actions and Governance Reforms
  11. Strengthening Investor Confidence and Business Environment
  12. Global Recognition and Projections
  13. Future Outlook and Growth Prospects
  14. Conclusion and Way Forward
  15. These headings provide an outline of the key themes, analyses, and narratives presented in the white paper, offering insights into the economic trajectory, policy interventions, and achievements of the Indian economy over the past decade.

Question: What is the summary of this paper?

Answer: “White Paper on the Indian Economy” provides an overview of the Indian economy’s status in 2014 when the current government took office. It describes the challenges faced at that time, including economic mismanagement, financial indiscipline, and corruption. The government refrained from releasing a white paper then to avoid a negative narrative and instead focused on stabilizing the economy, attracting investments, and implementing reforms.

The paper emphasizes the government’s commitment to putting the nation first and outlines the steps taken to address the economic and governance crises inherited in 2014. It discusses the policies and decisions that led to economic recovery and growth, highlighting the importance of right policies, true intentions, and appropriate decisions.

Overall, the white paper aims to inform the Members of Parliament and the public about the challenges overcome by the government through economic management and governance, leading the country towards sustained high growth.

Question: Can you give me 10 important points from this?

Answer: Here are 10 important points from the “White Paper on the Indian Economy”:

  1. The economy faced challenges in 2014, including economic mismanagement, financial indiscipline, and widespread corruption.
  2. The government refrained from releasing a white paper initially to avoid a negative narrative and focused on stabilizing the economy and attracting investments.
  3. The government believed in ‘nation-first’ and aimed to build support for much-needed reforms.
  4. The white paper aims to apprise the Members of Parliament and the public about the governance, economic, and fiscal crises inherited in 2014.
  5. It also informs about the policies and measures taken by the government to restore the economy’s health and fulfill growth aspirations.
  6. The government’s economic management and governance helped overcome challenges from the pre-2014 era.
  7. The country is now on a path of sustained high growth due to the right policies, true intentions, and appropriate decisions.
  8. Pervasive corruption was noted in various government activities, including procurement, allocation of natural resources, and regulatory approvals.
  9. The government’s efforts have led to a turnaround in the economy, rebuilding the country’s image and rekindling hopes for a better future.
  10. The white paper aims to generate a wider debate on the paramountcy of national interest and fiscal responsibility in governance over political expediency.

These points highlight the challenges faced, the government’s actions to address them, and the positive outcomes achieved in terms of economic stability and growth.

Question: What are key technical terms used in this paper?

Answer: The “White Paper on the Indian Economy” includes several key technical terms related to economics, governance, and policy. Here are some of the key technical terms used in the document:

  1. Macroeconomic situation
  2. Fiscal responsibility
  3. Governance
  4. National interest
  5. Double-digit inflation
  6. Banking sector
  7. Policy uncertainty
  8. Business climate
  9. Fiscal deficits
  10. Revenue deficits
  11. Scams
  12. Economic growth potential
  13. Insolvency and Bankruptcy Code (IBC)
  14. Foreign exchange reserves
  15. Real GDP growth
  16. Inflation targeting
  17. Goods and Services Tax (GST)
  18. Foreign direct investment (FDI)
  19. Corporate sector balance sheets
  20. Investment slowdown
  21. Supply bottlenecks
  22. Financial sector policies
  23. Monetary policy framework
  24. Capital flow management
  25. Infrastructure investments

These terms are crucial in understanding the economic challenges, reforms, and progress discussed in the white paper.

Question: What are the corruptions this paper is discussing and what is their magnitude?

Answer: The “White Paper on the Indian Economy” discusses several corruption cases that had a significant impact on the Indian economy. These corruption scandals have had far-reaching consequences, including legal proceedings, investigations, and efforts to improve transparency and accountability in governance. They highlight the challenges posed by corruption in India and the importance of combating it through effective measures and enforcement of anti-corruption laws.

  1. 2G Telecom Scandal: This scandal involved a loss of about ₹1.76 lakh crore of potential revenue to the government due to corruption in the allocation of 2G spectrum.
  2. Adarsh Housing Society Scam: Irregularities in the allocation of apartments in a high-rise building in Mumbai meant for war widows and veterans. The apartments were allegedly allocated to politicians, bureaucrats, and military personnel at below-market rates.
  3. AgustaWestland Scam: Legations of corruption in the procurement of helicopters for the Indian Air Force from the Italian company AgustaWestland.
  4. Chopper Scam: Allegations of kickbacks in the purchase of helicopters for VVIPs from a foreign defense company.
  5. Coal Block Allocation Scandal: Irregularities and corruption in the allocation of coal blocks to private companies for captive use resulted in an estimated loss of approximately ₹1.86 lakh crore to the exchequer.
  6. Coalgate Scam: A scandal related to the allocation of coal blocks to private companies without following proper procedures, resulting in significant financial losses to the government. The Supreme Court of India canceled the allocations and ordered a thorough investigation.
  7. Commonwealth Games Scam: Corruption and mismanagement in the organization of the 2010 Commonwealth Games held in Delhi. The scandal involved inflated contracts, substandard infrastructure, and financial irregularities.
  8. INX Media Case: This case involved money laundering and irregularities in foreign investment approval for investment into a media company.
  9. PNB-Nirav Modi Scam: A multi-billion dollar fraud involving jeweler Nirav Modi and his uncle Mehul Choksi in defrauding the Punjab National Bank through fraudulent issuance of Letters of Undertaking.
  10. Saradha Chit Fund Scam: A Ponzi scheme operated by the Saradha Group that defrauded thousands of investors, particularly in West Bengal, by promising high returns on their investments. The scam led to financial distress for many depositors.
  11. Vyapam Scam: A massive admission and recruitment scam involving politicians, officials, and businessmen in Madhya Pradesh related to entrance examinations and recruitment tests conducted by the Madhya Pradesh Professional Examination Board.

Question: Can you share a table of all these corruptions along with their value, ministry and year?

Answer:

Corruption Scandal Value (in crores) Ministry/Department Involved Year
2G Spectrum Scam 1.76 lakh Cr Ministry of Communications and Information Technology 2008
Coalgate Scam 1.86 lakh Cr Ministry of Coal 2012
Commonwealth Games Scam Not specified Ministry of Youth Affairs and Sports 2010
Saradha Chit Fund Scam Not specified Not specified 2013
Vyapam Scam Not specified Madhya Pradesh Professional Examination Board Not specified
Adarsh Housing Society Scam Not specified Not specified Not specified
AgustaWestland Scam Not specified Ministry of Defence Not specified
PNB-Nirav Modi Scam 13,000 Cr Punjab National Bank 2011
Chopper Scam Not specified Ministry of Defence Not specified
INX Media Case Not specified Not specified Not specified
Vyapam Scam Not specified Madhya Pradesh Professional Examination Board Not specified
Adarsh Housing Society Scam Not specified Not specified Not specified

Question: Why this paper was brought?

Answer: The “White Paper on the Indian Economy” was brought forth to provide an overview of the economic challenges, governance issues, and fiscal crises inherited by the current government when it assumed office in 2014. The primary reasons for bringing this white paper are as follows:

  1. Informing Stakeholders: The paper aimed to inform Members of Parliament and the public about the nature and extent of the governance, economic, and fiscal crises that existed in 2014.

  2. Transparency and Accountability: By presenting a detailed account of the challenges faced by the government, the white paper sought to promote transparency and accountability in governance.

  3. Policy Evaluation: It provided an opportunity to evaluate the policies and measures taken by the government to address the economic and governance issues and restore the health of the economy.

  4. Building Confidence: The white paper aimed to build confidence among stakeholders, including investors, by showcasing the government’s efforts to stabilize the economy and attract investments.

  5. Highlighting Achievements: It aimed to highlight the achievements and progress made by the government in overcoming the challenges inherited from the previous administration.

  6. Debating National Priorities: The paper intended to generate a wider debate on the paramountcy of national interest and fiscal responsibility in governance over political expediency.

Overall, the “White Paper on the Indian Economy” served as a tool to communicate the government’s vision, actions, and achievements in steering the economy towards recovery and growth while addressing the legacy issues from the pre-2014 era.

Question: Can you share the key statistics discussed in this paper?

Answer: The “White Paper on the Indian Economy” discusses several key statistics and indicators to provide insights into the economic situation, reforms, and progress made by the government. Here are some of the key statistics highlighted in the document:

  1. Net Interest Margin (NIM):
    • 2013-14: 2.45%
    • 2022-23: 2.72%
  2. Return on Assets (RoA):
    • 2013-14: 0.50%
    • 2022-23: 0.79%
  3. Return on Equity (RoE):
    • 2013-14: 8.48%
    • 2022-23: 12.35%
  4. Macroeconomic Fundamentals:
    • Current account balance as a percentage of GDP improved from -4.8 in Taper 1 (2012-13) to -1.2 in Taper 2 (2021-22)
    • YoY Real GDP growth increased from 5.5% in Taper 1 to 9.1% in Taper 2
    • Foreign exchange reserves as a percentage of GDP increased from 16.0% to 20.1%
    • Headline YoY inflation decreased from 9.9% to 5.5%
    • Exchange rate depreciation (INR/USD) (YoY) decreased from 6.3% to 3.1%
  5. Average Availability of Electricity (Rural): Increased from 12 hours in 2014 to 20.6 hours in 2023
  6. Average Toll Plaza Waiting Time: Decreased from 12.2 minutes in 2014 to 47 seconds in 2023
  7. Capital Expenditure:
    • Increased from 1.7% of GDP in FY14 to 3.2% of GDP in FY24 (RE)
    • Share of capital expenditure in total spending by the Central Government improved to 28% in FY24 from 16% in FY14
  8. Cargo Traffic at Major Ports: Rose from 581 million tonnes to 784 million tonnes
  9. Cities with Metro Rail: Increased from 5 cities at the end of 2014 to 20 cities by the end of 2023
  10. Consequential Rail Accidents: Reduced from an average of 233 accidents between FY05 and FY14 to 34 accidents between FY15 and FY23
  11. Electrification Status: Improved to 100% electrification as of 2023, up from 85.1% in 2014
  12. Electrified Rail Network: Expanded from 21.8 thousand km to 60.8 thousand km
  13. Electrified Rail Route: Increased from 22,224 km in FY15 to 50,394 km in FY22
  14. Electronics Exports: Increased from $7.6 billion in FY14 to $22.7 billion in FY23
  15. Foreign Direct Investment (FDI): Sum of Gross FDI increased from $305 billion (FY05-FY14) to $596.5 billion (FY15-Nov 2023)
  16. Funds Transferred to Underprivileged Households: Rose from Rs. 7,367 crore in FY14 to Rs. 7,16,396 crore in FY23
  17. GDP Per Capita (PPP): Increased from $3,889 (average per capita GDP between FY05-FY14) to $6,016 (average per capita GDP between FY15-FY23)
  18. Harvard Economic Complexity Index: Improved ranking from 52 in 2011 to 42 in 2021, indicating a more sophisticated Indian economy
  19. Indirect Tax Rate: Average pre-GST indirect tax rate decreased from 15% to 12.2% (as of March 2023)
  20. Inflation: Inflation rate decreased from 8.2% (CAGR between FY04-FY14) to 5.0% (CAGR between FY14-FY23)
  21. Installed Renewable Energy Capacity: Expanded from 76 GW as of March 2014 to 181 GW as of December 2023
  22. Length of National Highways: Increased from 0.98 lakh km in FY15 to 1.45 lakh km in FY23
  23. Multidimensional Poverty: Percentage of population in multidimensional poverty decreased from 29.2% (end of 2013-14) to 11.3% (end of 2023)
  24. National Highway Constructed Length: Expanded from 25.7 thousand km to 54.9 thousand km
  25. National Highway Construction: Pace of national highway construction increased from 12 km/day in FY15 to 28 km/day in FY23
  26. Number of Airports: Doubled from 74 airports as of the end of 2014 to 149 airports as of February 2024
  27. Number of LPG Connections: Increased from 14.5 crore (as of April 2014) to 31.4 crore (as of August 2023)
  28. Number of PNG Connections: Increased from 22.3 lakh (as of April 2014) to 119 lakh (as of October 2023)
  29. Number of Start-ups: Increased from 350 companies in 2014 to 1,17,257 companies as of December 2023
  30. Number of Tap Water Connections (Rural): Rose from 3.2 crore (as of August 2019) to 13.8 crore (as of December 2023)
  31. Rupee Depreciation: Managed the current account prudently and ensured its smooth funding via stable FDI, with a significant increase in FDI inflows
  32. Total Installed Power Capacity: Increased from 249 GW as of March 2014 to 429 GW as of December 2023
  33. Total Number of DBT Beneficiaries: Increased from 10.8 crore (as of FY14) to 166 crore (as of FY23)
  34. Waste Processed by Urban Local Bodies: Increased from 18% of total waste generated in 2014 to 76% as of February 6, 2024

These statistics reflect the government’s efforts in expanding infrastructure, improving transportation networks, enhancing rail safety, increasing airport connectivity, reducing waiting times, and boosting power generation capacity, including renewable energy sources.

Question: What actions government has taken in last 10 years. Can you give the list of that?

Answer: Here is a list of actions taken by the government in the last 10 years to address corruption and improve governance:

  1. Asset Declaration by Public Officials: Requiring public officials to declare their assets and liabilities to promote accountability and deter illicit enrichment.
  2. Asset Recovery and Repatriation: Pursuing efforts to recover and repatriate assets stashed abroad through illegal means, including the signing of mutual legal assistance treaties with other countries.
  3. Benami Transactions Prohibition Act: Enactment of the Benami Transactions (Prohibition) Act to curb benami transactions and properties held in the name of proxies to evade taxes and conceal illicit wealth.
  4. Corporate Governance Reforms: Implementing reforms to enhance corporate governance standards, promote ethical business practices, and prevent corporate fraud and corruption.
  5. Demonetization: Demonetization of high-denomination currency notes to curb black money, promote digital transactions, and increase transparency in financial transactions.
  6. Digital Payments and Cashless Economy: Promotion of digital payments and the cashless economy to reduce the circulation of black money, enhance transparency in financial transactions, and curb corruption.
  7. Digitization of Governance: Embracing digital technologies to enhance transparency, reduce bureaucratic hurdles, and minimize opportunities for corruption.
  8. Empowerment of Anti-Corruption Agencies: Providing adequate resources and autonomy to anti-corruption agencies to effectively investigate and prosecute corruption cases.
  9. Ethics and Integrity Training: Conducting ethics and integrity training programs for public officials to instill a culture of honesty, accountability, and ethical conduct in governance.
  10. Formation of Special Investigation Teams (SITs): Setting up SITs to investigate high-profile corruption cases and expedite legal proceedings.
  11. Goods and Services Tax (GST): Implementation of the GST regime to streamline indirect taxation, reduce tax evasion, and enhance transparency in the tax system.
  12. Implementation of Anti-Corruption Laws: Strengthening and enforcement of existing anti-corruption laws to combat corrupt practices in various sectors.
  13. Insolvency and Bankruptcy Code (IBC): Implementation of the IBC to address non-performing assets (NPAs) in the banking sector, promote corporate transparency, and facilitate the resolution of distressed assets.
  14. International Cooperation: Collaborating with international agencies and organizations to combat cross-border corruption and money laundering.
  15. Introduction of Aadhaar: Implementation of the Aadhaar system for unique identification, which has helped in reducing leakages and ensuring targeted delivery of welfare benefits, thereby minimizing corruption in social welfare schemes.
  16. Judicial Reforms: Initiating judicial reforms to expedite trials, enhance accountability in the judiciary, and ensure swift justice in corruption cases.
  17. National Anti-Profiteering Authority (NAA): Establishment of the NAA to ensure that the benefits of GST rate reductions are passed on to consumers and prevent profiteering by businesses.
  18. Promotion of E-Governance: Promoting e-governance initiatives to streamline government services, reduce human interface, and minimize corruption risks.
  19. Public Awareness Campaigns: Conducting public awareness campaigns to educate citizens about their rights, the consequences of corruption, and the importance of reporting corrupt practices.
  20. Public Procurement Reforms: Introducing reforms in public procurement processes to enhance competition, prevent bid rigging, and promote integrity in government contracts.
  21. Transparency in Public Procurement: Implementing transparent processes in public procurement to prevent kickbacks and favoritism.
  22. Whistleblower Protection: Introducing measures to protect whistleblowers who expose corruption and malpractices.

These actions reflect the government’s commitment to combating corruption, promoting transparency, and strengthening governance mechanisms to build a more accountable and efficient administration.

Question: What are the key sources/references used to create this white paper?

Answer: The key sources/references used to create the white paper on the Indian economy include:

  1. Government of India official publications and reports.
  2. Ministry of Finance documents and data.
  3. Budget Speeches and Economic Survey reports.
  4. Press releases and statements from government agencies.
  5. Official websites of government departments and ministries.
  6. Economic indicators and data from reputable sources.
  7. Reports from international organizations like the World Bank, IMF, and OECD.
  8. Academic research papers and studies on the Indian economy.
  9. Policy documents and initiatives introduced by the government.
  10. Statements and speeches by government officials and policymakers.

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