However, the party manifestoreleased by Prime Minister Manmohan Singh and Congress president Sonia Gandhi in New Delhi on Tuesdaydoes not outline any immediate expansion of public investment to follow the three stimulus packages already announced by the government. Instead, Singh said he expected those packages to deliver higher growth soon.
I am confident that because of the stimulus our government has announced, in the next six to seven months the revival of the Indian economy should take place in a big way, he said. The party expects to use the higher growth to spend on its list of priorities, which begins with education, and lists health, agriculture, social security and infrastructurein that order.
The partys 2009 manifesto is more emphatic on disinvestment than the Common Minimum Programme cobbled together after the Congress and its allies won the 2004 general elections. One para states, Indian people have every right to own part of the shares of public sector companies, while the government retains the majority shareholding.
To steer clear of controversy, it also makes clear that public sector banks and insurance companies would not be privatised. Disinvestment in public sector companies will reduce the runaway fiscal deficit from the current 6%, which has crippled the governments ability to mount any major investment programme in a decelerating economy.
In a reflection of the changing face of the Indian economy, the Congress manifesto has promised financially viable self-government for urban areas. Because of the pressure from regional state-based parties, this was an absolute no-no so far as they felt it would clip their powers.
Measures to boost demand include the announcement of a National Food Security Act as part of the two major sops for rural India.
Building on the success achieved under the flagship National Rural Employment Guarantee Scheme, the Congress manifesto says it will a clause into the Bill that the government would have to sell at Rs 3 per kg, 25 kg of wheat or rice to every family below the poverty line.
The price is roughly the same at which foodgrain is now sold to the poor under the Antodaya Anna Yojana. As on March 1, Indias wheat stocks are estimated to be around 15.3 million tonne, against last years stocks of 6.5 million tonne. Rice stocks are estimated at 21.3 million tonne, against 14.7 million tonne.
Using this buffer is expected to keep the pressure on food price inflation in check, unlike the present situation where it is still 10% despite headline inflation having slipped to near zero. Following up on the loan waiver, the Congress has also promised to reduce interest rates for all farmers who repay bank loans on schedule.
The party also plans to push up the floor on wages of agricultural labourers to Rs 100 across the country. The average minimum wage now varies between Rs 75 a day in Orissa to as high as Rs 135 a day in Haryana. This thrust to rural demand through the NREGS could propel sales of FMCG goods and improve the savings rate in rural India.