BOOM, BUST AND DRIFT

UPA's economy swung from high-growth global confidence to inflation, policy paralysis and capital flight, stabilising late under crisis management, but ending in exhaustion, lost credibility and an electorate unconvinced by belated recovery signs

- KAUSHIK ROY

The economic story of the UPA years is best understood not as a straight line of rise and fall, but as a pendulum, swinging from exuberant confidence to creeping anxiety, from global swagger to domestic self-doubt.

Between 2005 and 2014, India experienced one of its most dramatic economic arcs since liberalisation: a mid-decade boom followed by a prolonged slowdown marked by inflation, capital flight, regulatory overreach and institutional paralysis.

By the middle of the first UPA term, the Indian economy appeared to have hit a sweet spot. Growth averaged close to 9 per cent, corporate profits surged, tax collections soared and consumer confidence was buoyant. The Sensex crossing 20,000 in December 2007 was not merely a market milestone. It was a psychological marker that India had arrived as a serious economic power. Tata Steel’s acquisition of the Anglo-Dutch steelmaker Corus Group and Aditya Birla Group flagship Hindalco’s takeover of US aluminium major Novelis in 2007 marked a defining moment, announcing that Indian entrepreneurs were no longer content to be junior partners in global capitalism. Tata Motors’ purchase of Jaguar Land Rover in 2008 signalled a broader shift. Indian firms were using the balance sheets created by high domestic growth to buy global scale and prestige.