The BJP has promised to revive the economy, create new jobs and encourage entrepreneurship and overhaul the agro-market. However, the party has not elucidated how exactly it plans to achieve these goals
The BJP manifesto promises a credible and trustworthy Government that will re-sow popular confidence in the India story by containing price rise, increasing jobs, creating opportunities for entrepreneurship and reviving the national agricultural market. But the manifesto remains vague on specific steps the BJP will take to revive the economy.
It is virtually non-committal on the tax policy though it says it will end “tax terrorism” as well as rationalise and simplify the tax regime. But it is silent on the process. Before the manifesto was cast, the party had debated the issue. Mr Nitin Gadkari and Mr Subramanian Swamy had argued ending personal income tax while Mr Arun Jaitley’s was opposed to it.
Mr Swamy’s contention is simple. Only about three crore people in India pay personal income tax, and the tax rules turn much of the hard-earned white money into black. Refunds are too high to the tune of almost Rs 70,000 crore a year. Also, the tax collection mechanism is cumbersome and expensive. Every taxpayer, instead of being extended basic respect, is looked at with suspicion. The abolition of tax will save the Government and the citizen much bother.
Despite the manifesto’s concern about State autonomy, the BJP’s approach to the Goods and Services Tax does not reflect the reservations of the States. GST has been pending despite the UPA Government’s adamant attitude on a uniform tax pattern all through the country to suit the needs of corporates.
The States have been protesting against this. They are not against uniform rates but oppose tax collection by the Union Government. They want a decentralised process instead. The BJP may have deliberately refrained from elaborating on this issue so as to keep its different constituents guessing.
The previous NDA regime, as the BJP has claimed, was able to break the cycle of high inflation and high interest rates. Its new course, however, is short of instilling the required trust. The two methods suggested — special courts against black marketing and a price stabilisation fund — are controversial.
The Essential Commodities Act had been diluted by the previous NDA Government. Now, prosecution makes little sense except that it will lead to the harassment of small traders.
As for the Price Stabilisation Fund, the scheme was launched in 2003 by NDA for some products — coffee, tea, natural rubber and tobacco — to provide financial relief to the producers when prices of these commodities fell below a specified level, without the Government itself procuring those products. The producers received Rs 8,80,000 between 2007 and 2010 from the PSF. A total contribution of Rs 6,43,000 towards enrollment fee under the PSF scheme was received from 46,239 producers.
The consumer of any of these commodities did not benefit. Soon after the introduction of the PSF, coffee and tea prices shot up and are continuously rising. Its implementation at the national level is not only difficult, it is doubtful if it will be beneficial for the consumer.
The proposal to unbundle the Food Corporation of India for greater efficiency in procurement and distribution is sensible, provided it is allowed to function as a market intervention agency. Also, evolving a national agriculture market seems a good proposition but it has to come with an increase in public investment which the manifesto promises.
But this will require changes in many laws and the creation of an effective mechanism. Presently, it is restricted to the proposal to amend the Agricultural Produce Market Committee Act. The farmers are divided on this issue. Some of them have benefitted from it while other have had problems.
Before any step is taken, there must be detailed discussion or else the new measures might go against the consumers, as in the case of the PSF, and prices may likely go through the roof instead of coming down.
The road map for job creation is also not clear. After 10 years of jobless growth, the country needs direction. The manifesto does not state how textile, footwear and electronics can become labour-intensive, if free imports from China and South Korea continue. The manifesto is silent on growing imports, which is eating into the job market.
There is hope in the “national land use policy” through the creation of the National land Use Authority. But then again, there are already many regulators. Each works more in the interest of certain groups with vested interests. It is difficult to fathom how this another agency can protect the interest of farmers.
Similarly, the sop for industry of simplifying procedures and introducing a single-window system for clearances does not eliminate the points of corruption that led to the 2G and ‘coalgate’ scams. A simple solution has been suggested by the PHD Chamber of Commerce and Industry and the Federation of Indian Chambers of Commerce and Industry. Before handing over any project to a company, the Government itself should ensure that all clearances, including ecological, have been given. This will end the process of greasing the palms of officials and politicians at various levels.