Consumer Stay Back! BJP, Congress In Brand War

Updated: Mar 21 2004, 05:30am hrs
The two leading brands in India are engaged in a fierce battle for a larger market share. Between them they control and are likely, in the immediate future, to control about 60 per cent of the national market. Each of the two brands has tag-on brands, but these tag-on brands largely serve regional markets.

Brand BJP and Brand Congress are poised to launch themselves, presumably as new and made-over products, in the market. By the time of this writing, I do not have either the Vision Statement of the BJP or the Election Manifesto of the Congress. Cricket seems to have thrown a spanner in the works and wrecked the original time-tables for their release. We are now told that they will be released next week.

How does the consumer distinguish Brand BJP from Brand Congress And how does the consumer choose one brand over the other A heavy responsibility lies on the consumers as a class because once they have preferred one brand over the other by a majority, no doubt the whole consuming class has to live with that brand for five years. The contract will be for five years unless, of course, the brands performance is so bad that it collapses midway through the period of the contract.

A Vision Statement would help to make an informed choice. So would a Manifesto. At this stage, I must utter a word of caution. Both are pre-election pronouncements. They may undergo drastic revisions post-elections. Each of them may metamorphose into a NAG (National Agenda for Governance) or a CMP (Common Minimum Programme). The final shape of the document describing the brand of governance will be the NAG or the CMP.

What should the consumer the voter look for in the Vision Statement and in the Manifesto Here are a few guidelines:

Investment
As long as the investment to GDP ratio is stuck in the rut of 22-24 per cent, there is no way that the growth rate can be taken to a higher level of 8 per cent or more. That is plain and simple commonsense. No one has invented a gravity-defying formula to make an economy take wings without adequate investment. So, look out for passages dealing with measures to encourage savings, promote domestic investment and attract foreign investment. For every promise to curtail government expenditure add one mark. For every promise to open a sector to foreign direct investment or to remove sectoral caps add two marks. Each time the document uses the word swadeshi deduct one mark.

Agriculture
Both parties are dominated by urban leaders. Both have acquired a new breed of corporatised-politicians. This is a huge disadvantage. Nevertheless, I hope that there are enough men and women in the two parties who acknowledge that 70 per cent of the population lives in rural areas, 70 per cent of the workforce is dependent on agriculture and the agriculture sector contributes only 28 per cent to the GDP. The story of Indian poverty lies in those three numbers. The answer, in the short term, is to increase farm income and supplement that with income from off-farm activities. This calls for huge investments in dams, canals, water harvesting, irrigation facilities, improved seeds, soil testing, better fertilisers and pesticides, storage facilities, transportation and access to markets. If we can raise the level of productivity in six agricultural products wheat, rice, pulses, oilseeds, sugarcane and cotton to the best-level in the world, we can lick poverty in ten to twenty years.

The Ninth Plan (1997-2002) outlay on Agriculture and Allied Activities was Rs 42,462 crore out of a total Plan outlay of Rs 859,200 crore. This included the Centre, the States and the Union Territories. As a percentage that amounted to 4.9 per cent. In fact, in the last two years of the Plan period the percentages were only 4.1 and 3.9.

Over the Tenth Plan period (2002-2007) the projected outlay is only 3.9 per cent of the total Plan outlay, and in the first year (2002-03) it was only 2.6 per cent. Need more be said about the concern of political parties and governments for agriculture

Disinvestment/Privatisation
The two words are not synonyms, yet they are frequently used interchangeably. The intent is to confuse. No one has done it more successfully than my friend, Mr Arun Shourie (but that deserves a separate article). Just as the public sector became an article of faith in the 1960s and 1970s, deconstructing the public sector is being currently driven by blind faith. If a public sector enterprise can compete and be successful in an open market economy, we should let it remain in the public sector. All other public sector enterprises must be privatised. Privatisation alone will unlock the true potential of the company. Thus, while NTPC must remain in the public sector, we must create more BALCOs, out of ailing public sector companies.

If the document waffles about privatisation, deduct five marks. If it contains a statement like we shall dilute the governments shareholding in public sector banks to 33 per cent without altering the public sector character of the bank, deduct ten marks. If it describes disinvestment/ privatisation as selling the family silver to pay the grocers bill, dump the document.

Inflation
The manufacturing sector loves inflation. Inflation is an excuse to push up prices. Tax collectors love inflation because excise and customs revenue targets can be reached without sweat. It is the common man who hates inflation. Let the common man be king for at least eight weeks. If the document betrays any tolerance for inflation, burn it. If it does not contain a strategy to contain inflation, shred it. If it is serious about keeping inflation below 3 per cent, read it. Look for passages on controlling government expenditure. Will the number of ministries/ departments at the Centre be slashed to no more than fifty Will the total number on the government rolls be reduced by at least 10 per cent over the next five years Will the revenue deficit be wiped out by 2009-10

I know that the average voter is not only homo economicus. He or she is swayed by other legitimate concerns and, sometimes, other irrelevant considerations. But, just this one time, I hope he or she will vote as homo economicus.

(The author is a former Union finance minister)