BJP manifesto: Bunch of promises

| Updated on April 09, 2019

The manifesto is long on welfare but short on fiscal and macroeconomic detail

In view of the poll pitch post-Balakot, it does not come as a surprise that the ruling party has played up national security in its manifesto, released on Monday. However, its economic promises are a bits-and-pieces affair, which leave some questions unanswered. With the political spotlight on rural distress, the BJP has promised extending its income support scheme of PM Kisan Samman Nidhi Yojana to all farmers. In addition, small and marginal farmers have been assured of a pension scheme, while Kisan credit card loans up to ₹1 lakh will be made available at zero interest. Notably, the promise to double farm incomes by 2022 has been decoupled from hard assurances on MSP increase, while loan waivers have been eschewed. This marks a paradigm shift in agriculture policy, and a pragmatic one too. While organic farming gets some emphasis, agriculture has not been linked with regeneration of natural resources and climate change challenges. For industry and services, the manifesto promises more of the same. It reiterates its resolve to move up the ease of doing business rankings and cites GST and the bankruptcy code as major successes. Start-ups, digitisation and the AI push are at the centre of the policy on services.

But there is little on offer by way of a jobs programme. ‘Make in India’ has been trotted out as a matter of routine, with the usual promises of making India attractive for FDI — but it is no longer as integral to the party’s vision or promises, as it was in 2014. In sum, there is no overarching macroeconomic, or even fiscal, vision for an economy that is expected to be the third largest in the world by 2030. If it is not clear how the Congress’ minimum income programme can be funded, the same applies to the BJP’s promises. The emphasis on tax compliance (accompanied by the promise of lower rates) and the reduced leakages presumably accruing from the so-called Jan Dhan-Aadhaar-Mobile trinity may not be enough. However, the larger take-out from both manifestoes is that rural welfarism is here to stay, necessitating a new fiscal math. By not committing funds to education and health, the BJP manifesto has not addressed the demographic dividend question.

It is, however, just as well for the BJP to promise a ‘decisive’ government. For example, it is remarkable that 2.18 crore beneficiaries out of the targeted 12 crore farmers got their first instalment of PM-Kisan a month after the Budget. Ayushman Bharat has been quite successful so far. ‘Surgical strikes’ — on black money, terror, the Citizenship Bill and much else — have been executed without a hint of vacillation. The dangers of such an approach for stability, both political and economic, have, however, been simply glossed over, with the government claiming that its growth record has been the best in the post-reform years. There’s a touch of hubris here, notwithstanding its reform achievements.

Published on April 09, 2019

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