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Our Bureau

The Congress President and Chairperson of the United Progressive Alliance, Ms Sonia Gandhi, with the Prime Minister, Dr Manmohan Singh, at the release of the Common Minimum Programme in the Capital on Thursday. - Kamal Narang

New Delhi , May 27

ON a pleasant, rainy afternoon unusual for this time of the year, the ruling United Progressive Alliance (UPA) released its Common Minimum Programme (CMP), a please-all document seeking to balance the reformist zeal of the Congress with the economic concerns of the Left.

The CMP has stated that profit-making public sector undertakings (PSUs) will "generally" not be privatised and all privatisations "will be considered on a transparent and consultative case-by-case basis."

The Navaratnas (IOC, ONGC, HPCL, BPCL, NTPC, BHEL, SAIL, etc) would, in particular, be retained in the public-sector fold and no PSU would be privatised if it leads to the emergence of a monopoly or restricts competition. This virtually rules out the sale of companies such as Nalco.

Similarly, not only would public sector insurance companies not be privatised, but also the social obligations imposed by regulatory bodies on private banks and insurance companies "will be monitored and enforced strictly."

The other specific concessions made to the Left are the rejection of the "idea of automatic hire and fire" and not taking away or curtailing the rights and benefits earned by workers, "including the right to strike according to law."

While recognising that "some changes in labour laws may be required," the CMP has made it clear that this relates to only laws "other than the Industrial Disputes Act." In other words, the industry can, at most, expect revisions in other legislations such as the Contract Labour Act.

Also, decisions concerning the Employees Provident Fund (EPF) will not be taken "without consultations with and the approval of the EPF Board," and interest rates will provide incentives to both investors and savers, "particularly pensioners and senior citizens."

Moreover, the UPA Government will "immediately" enact a National Employment Guarantee Act that provides a legal guarantee for at least 100 days of employment to begin with on asset-creating public works programmes every year at minimum wages "for at least one able-bodied person in every rural, urban poor and lower middle-class household."

For the pro-reformers, the heartening feature of the CMP document is the commitment to eliminate the Centre's revenue deficit by 2009, towards which a detailed roadmap will be unveiled in Parliament within 90 days. While this is one year later than the 2008 deadline mentioned in the Fiscal Responsibility and Budget Management Act, 2003, it is, however, believed that the explicit pledge to bring down the revenue deficit to nil, from the existing Rs 100,000 crore, will act as a natural check against populism.

The CMP has further underlined that all subsidies will be "targeted sharply at the poor and the truly needy." The Left's demand to immediately restore the earlier universal public distribution system will be considered over time, that too only "if found feasible."

Efforts would also be made to improve the functioning of the Food Corporation of India to control inefficiencies that increase the food subsidy burden. Subsidies in power and other infrastructure areas "will be made explicit and provided through the Budget."

The document has sought to address the farm sector's concerns through specific pledges, such as doubling rural credit in the next three years, completing all existing irrigation projects within three-four years and clearing dues of all farmers, including sugarcane growers, "at the earliest."

The rest are all general statements of intent: stepping up public investment in agricultural research, rural infrastructure and irrigation "in a significant manner at the very earliest," making crop and livestock insurance schemes "more effective," "systematically removing" controls that depress farm incomes and maintaining terms of trade in favour of agriculture. The UPA Government would also provide "adequate protection" to all farmers from imports, "particularly when international prices fall sharply."

The CMP has adopted a similarly broad approach with regard to the capital markets and industry. Thus, financial markets will be deepened, SEBI will be further strengthened and foreign institutional investors will continue to be encouraged. Again, in a concession to the Left, it has been stated that "the vulnerability of the financial system to the flow of speculative capital will be reduced," "misuse of double taxation agreements will be stopped" and "strictest action will be taken against market manipulators."

In the social sectors, the document has promised to raise public spending in education to at least 6 per cent of the GDP "in a phased manner" and raising it in health "to at least 2-3 per cent of the GDP over the next five years."

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