The government provides a framework for economic agents to operate and the reforms that are implemented help facilitate growth. A comparison of the financial record shows that both regimes had their fair share of hits and misses.
The government directly affects economic activity in the area of the Budget. But even here it has a limited role as the direct action is found in State budgets which are one-and-a-half times bigger than that of the Centre.
Though it is a fact that the NDA government has focused predominantly on fine-tuning and better implementation of the already existing policies and schemes under a repackaged brand to make them attractive and look new, the exercise has been relatively successful and has yielded good results.
Table 1 shows that the BJP-led government has scored better than the UPA on seven leading indicators which may be considered to be the primary variables which reflect the state of the economy. Growth has been higher during this period and inflation lower than in the previous regime.
There was a robust monetary policy framework which kept tabs on inflation even as fuel prices were marked to market in this situation. The BJP has done better on the fiscal deficit front too making it easier to achieve the FRBM targets.
The UPA seems to have done better in some of the secondary variables where again, it could have been more on account of serendipity. The Sensex boomed mainly due to the after-effects of the Lehman crisis when the indices had gone down sharply, and the base effect worked well.
Though the UPA government did the groundwork for releasing three carriers of 5MHz each in the 2100MHz band, it could not happen because the agreement with the defence ministry could not be worked out, that led to high bids in the 2015 auctions. Not only the defence ministry was brought on board making this spectrum available in the July auctions, the permission to allow spectrum trading and sharing ensured the optimum use of the possible range by telecom operators through tie-ups.
FII investment too was much higher during their 5-year tenure, though an average of $24 billion per annum was not very high. The lower inflows subsequently had more to do with the Fed reversing the QE and increasing rates which affected markets all across the world, including India.
Hence, if a variable-to-variable comparison is made between the two governments, they seem to be almost even in terms of the number of successes.