Cong promises 10% growth, end to poverty

The Congress party on Wednesday promised high economic growth for all, a boost to the corporate sector and end to unemployment, poverty, hunger and illiteracy, if it is voted back to power.

Releasing its 'vision document' on the economy' for the forthcoming Lok Sabha elections, the Congress charged the Bharatiya Janata Party-led National Democratic Alliance government with 'fiscal indiscipline' and said wrong economic policies of the coalition had wreaked havoc on the nation's economy.

Senior Congress leaders Manmohan Singh and Pranab Mukherjee, who released the document at the AICC headquarters in New Delhi, told reporters that it would ensure economic growth with a just society, freedom from hunger and unemployment.

"This economic record of the NDA government will not do. India deserves a better deal," Congress declared, adding that it would work for the realisation of 10 per cent economic growth in the next few years.

• BJP's 'economic vision' document pledges big growth

In a dig on BJP-led coalition which touted the growth figures in just two quarters, the party's 'vision document' said it will revive the past capacity to grow at 8 per cent, not just for two quarters of a year, but for a along period.

Manmohan Singh said no one in the world was 'buying' their argument of higher economic growth and even quoted rating agency Moody's observation that it was not more than 6.5 per cent average.

According to Moody's it was not possible to sustain high growth rate for a long period without development of the human resources and infrastructure, Singh said.

"The NDA government makes much of the second quarter (2003-04), GDP growth figure of 8.4 per cent, but that depends on what the base was in the second quarter of 2002-03 and this base was low because agriculture declined by 3.05 per cent in this quarter."

Making a scathing attack on the BJP, the vision document pointed out various 'failures' of the saffron party in reforming the economy.

"Unlike the Congress, the BJP had neither the heritage of modernising India, nor of championing the all round progress of the economy. At the time reforms were introduced, BJP leaders who are now heading the government were most vociferous in their opposition to the reforms," it said.

Seeking to take credit for the reforms, the Congress said the BJP could not appreciate the initiation of reforms in 1980s under Indira Gandhi nor could they appreciate Rajiv's vision for India's modernisation.

"The mismanagement by the non-Congress government cost the country a huge loss of output compared to its potential."

The vision document said the Congress wanted the middle class to genuinely prosper with great access to amenities of life.

"We want the corporate sector to grow as fast as it can, but it must bear some responsibility of helping the less privilege to enrich themselves," it said.

The document said a Congress government will guide the growth process and mobilise the common people so as to facilitate the achievement of some priority national objectives like abolition of unemployment, poverty, hunger, illiteracy an ensure universal coverage of primary healthcare.

It will also restore the full growth potential to the farm sector which "has been grossly neglected by the BJP government and which support most of our people, as also deliver development with accountability to the people.

The vision document said that for achieving a 10 per cent rate of economic growth, it would strive for raising the rate of investment, productivity of investment and enhancing resources to finance investment.

A highlight in this regard was elimination of all bureaucratic and administrative hurdles to investment by removing the requirements for any investor to seek any form of permission for making investment.

The limited regulation and control in this regard would be only for a short list of defence sensitive industries, specific rules to prevent abuse of environment and regulatory actions if investment increases concentration and monopoly power.

In order to facilitate rapid growth of efficiency and productivity, the party will build up a strong public-private partnership in promoting development and investment activity and also spoke of a new form of development rebate in corporate taxes for the purpose.

Besides, the document said that the party government shall encourage investors, especially the new and small entrepreneurs, the self employed, the educated young, particularly in areas of rural industry, housing and slum clearance with appropriate credit and capital subsidies.

Singh said a national commission would be set up to make concrete recommendations for encouraging investment and supporting enterprises in the informal sector.

Turning to agriculture, the document vowed to give the highest priority to meeting the investment requirements of sustained agriculture growth at the annual growth of 4.5 per cent.

"The most critical failure of the present government has been in agricultural and rural sector which supports two-thirds of Indian lives."

Asserting that plan allocations to agriculture must be raised substantially, it said private sector investment in agriculture are no substitutes for public sector investments in rural infrastructure.

The document also spoke of a Congress government restoring the fiscal discipline mainly by minimising the revenue deficit and by strictly disciplining capital expenditure.

It noted that for raising the rate of growth to 10 per cent a year, the rate of investment has to be raised to about 35 per cent, a figure similar to that of China and 'not at all improbable in India, with rejuvenation in the capital markets.'

"The financial sector, consisting of banking, insurance, debt and equity markets will need to be greatly strengthened to create an environment conducive to the growth of savings in the form of financial assets," it said.

Expressing concern over continued fiscal deficit of the Centre and the states during the six years of BJP rule, the document said it averaged 10 per cent of the GDP which is one of the highest in the world.

Noting that public finances of the Centre called for drastic restructuring, the Vision Document said large and persistent fiscal deficits financed by borrowings have created an explosive debt situation.

"If expenditure reform has failed, the record in revenue reform is no better. Disinvestments have become equated with strategic sales. No attempts has been made to restructure PSUs and fetch better value."

It stated these days development was sometimes being equated with bijli, sadak, pani (power, roads and water), three elements of physical infrastructure. These are indeed what all Indian citizens want.

"But considering that in the last three years power generation grew at no more than 3.5 per cent suggests that actual progress falls far short of our needs."

The vision document made it clear that the national economy was at a stage when with the "right set of policies and the right government to implement them," the country can grow at a high rate leading up to 10 per cent a year and abolish unemployment, poverty, hunger, illiteracy and ensure universal coverage of primary health care.

The highlights

Following are the main highlights of the 24-page Vision Document (Economic) released by the Congress Party which promises 10 per cent economic growth, a just society, freedom from hunger and unemployment as it top agenda, besides change with continuity.

• 1. High economic growth rate: Economic growth for all, particularly for the poor, the vulnerable and the backward classes.
• 2. Fast growth of corporate sector with some social responsibility of helping the less privileged.
• 3. Abolition of unemployment, poverty, hunger illiteracy and ensures the universal coverage of health care.
• 4. Restoration of the full growth potential to the farm sector.
• 5. Delivery of development with accountability to the people.
• 6. Creation of a congenial atmosphere for the growth of private investment, both domestic and foreign.
• 7. Encouraging strong public-private partnership in promoting development and investment activities.
• 8. Elimination of bureaucratic and administrative hurdles to investment.
• 9. Short-listing of defence sensitive industries while raising the rate of investment.
• 10. Setting up specific rules to prevent abuse of environment.
• 11. Regulatory action if investment increases concentration and monopoly power.
• 12. Encouragement to investors, especially the new and small entrepreneurs, the self-employed, the educated young persons, particularly in the areas of rural industries, housing and slum clearance, with appropriate credit and capital subsidies.
• 13. Special attention to provide technical, credit and marketing support to enterprises in the informal sector which account for nearly 90 per cent of India's labour force.
• 14. Setting up a national commission to make concrete recommendations for this purpose.
• 15. Introduction of a new form of development rebate in corporate taxes.
• 16. Increased access to credit, and support for enhanced research and development activities.
• 17. Liberalisation of technology imports as far as possible.
• 18. Restoration of fiscal discipline, mainly by minimising the revenue deficit and by strictly disciplining capital expenditure.
• 19. Setting up special missions to make concrete recommendations for maximising the development potential of important labour intensive industries.
• 20. Having a well-designed regulatory mechanism, to control the growth of monopoly through mergers and acquisitions to regulate prices of the non-competitive markets and to ensure competition in specific markets, including banking, insurance and telecommunications.