Rising prices remain a worry, but economy progressed

Rising prices remain a worry, but economy progressed

By Arvind Padmanabhan

Although high inflation remained a sore point during the first year of the United Progressive Alliance (UPA) government’s second term, some major steps were taken, such as a cut in fertiliser subsidy, to keep the reform process going.

Logging a 6.5-per cent growth when economies the world over were floundering and limiting the impact of the global slowdown on India were the high points of this government under Prime Minister Manmohan Singh, an internationally recognised economist widely applauded for economically reforming India and keeping it on a high growth path.

The unveiling of a new Direct Tax Code to rewrite the five-decade-old Income Tax Act, the increase in levies on crude and transport fuels and the hikes in fertiliser prices despite political opposition were the other notable achievements. On the flip side, though, was the total silence on reviewing the foreign investment norms on a host of sectors, the lack of movement forward in opening up the financial services industry and delays in implementing a host of infrastructure projects.

“Barring inflation and less-than-anticipated progress in roads and highways, the latest UPA government has been able to live up to India Inc's expectations," said the leading corporate lobby, the Associated Chambers of Commerce and Industry (Assocham). “The government has scored seven out of 10 points in the first-year performance since it assumed office for second term on May 22, 2009,” said the chamber, based on a survey it conducted among 500 chief executives across the country. Here is a list of hits and misses of the second term of the UPA government that was somewhat relieved by the electoral verdict of the people, which ensured it no longer needs the support of Left parties in the decision-making process.