Here are two things that stand out in the BJP, Congress and AAP manifestos

With all the three major parties contesting the elections having their manifestos in place the question is: are they really different from one another when it comes to economics? A manifesto is a charter of forward looking aspirations which indicate what the party plans to do once it is in power. It is not an assurance that this will be the road travelled but a statement of intent. What finally happens will depend on how much they are able to push through the Parliament and the elbow room they have when they have to handle the Budget.

Invariably after coming to power, the habit is to criticize the predecessor for leaving behind a fragile state of finances which requires one to pay for it. One can remember that the NDA had coined the phrase ‘bite the bullet’ which meant that the goodies offered before elections cannot be provided as things are really bad.

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If one looks closely at these manifestos, they read similar in scope. There are lots of paragraphs on spreading education, provision of good health facilities, empowering women, looking at the needs of minorities and addressing the demand of the youth, i.e. employment.

Quite expectedly everyone is for the Food Security Bill and modification of the NREGA scheme so that it is linked with the creation of assets. All parties are keen on spending on infrastructure and want to ensure that the people get the best, even though these lacunae have pervaded our system for decades now. Further, everyone appears to realize that centre-state relations need to be strengthened as it will be a political mistake to do otherwise. There is however, a tilt given in each of them, which is actually a reflection of the political agenda which is being played.

The Congress has extolled its success in welfare and has a definite pro-poor bias. Therefore, more targeted subsidies and employment schemes will be the order while they also work on reinvigorating growth which was not possible in the last 3 years. The stage has already been set by the present UPA government which can be harnessed to its potential. The UPA way forward will hence continue to have its focus on development as this has also been high on its list of achievements.

AAP also talks of the same but has oodles of governance thrown in. The feeling that one gets is that the same objectives of the UPA can be attained by the AAP if it comes to power once governance is in place. The amateurish nature of the manifesto is manifest in the wording where it sounds more aspirational rather than an agenda to do things differently. There is general talk on bringing about growth and employment, but the routes are not clear and the emphasis is more on honesty and integrity. Quite evidently a lot of work has to be done once it comes to power.

The BJP of course has been on the same path but talks aggressively of creating an enabling environment, thereby focusing on the implementation part. It talks of creating the right structure for doing business and hence has revealed it preference for depending on the capitalist to bring about the growth process - i.e. the Gujarat model.

Quite ironically, if all the three manifestos are put together and all the focal thrust areas are combined then this would be a utopic situation. The economic system would be one that works fast and smartly (BJP) under strict governance standards (AAP) which takes along with it the poor through positive affirmative action (Congress).

Are there any concerns as such about these intention documents? The AAP one is too general in nature and does not quite have a firm plan. Probably not being in power is a disadvantage as there is not quite a concrete roadmap to iron things out. The Congress and BJP statements talk of getting back growth but once in power, they will have to specifically draw up plans or else they would be plain motherhood statements. The UPA government has not quite managed to do what it hopes to do in the last 2 years which brings in some skepticism. The 100 day agenda or statements to bring back growth and manufacturing in the focus does not evoke the same confidence as the question asked is if this has not happened in the last 3 years, why should it happen in the next 3 years?

The BJP focus on getting things done would work in case this was the reason or decline in growth. Everybody wants to stimulate government spending, but if there is a fiscal constraint, then it may not quite work. The UPA government has not managed to use the budget to revive growth as things have gone wrong on the revenue side and the commitment to fiscal discipline has come in the way of project expenditure. There is no guarantee that this scenario will not be repeated this time again. In such an event, will the government compromise on other targeted expenditure like subsidies? More likely it is unlikely.

Two features in these manifestos deserve special attention. The first is on interest rates. Parties have mentioned that interest rates will be brought down. Now, frankly the decision on interest rates should be a central bank’s prerogative and there should be no political interference. Lowering interest rates at a time when inflation is still high can aggrandize conditions. Therefore, making such statements can be disturbing as it comes in the way of RBI’s functioning. Also such actions could impact public sector banks severely as they may be just forced to lend at lower rates thus endangering their profitability. This is a genuine fear.

The other concern is on pricing of farm products. In a bid to woo the farming community, the AAP and BJP have spoken of farm products being priced at 50 percent margin to cost of cultivation to ensure that farmers get a proper price. It has been argued that the MSPs in some states are lower than the cost of cultivation. This may set a dangerous precedent as there will once again be the tendency to set higher prices which has been responsible for high food inflation in the last three years. More importantly, this will once again be a case of political intervention in an economic process.

The common lacuna is that no party has spelled out a concrete plan to bring inflation down. Inflation is one single factor that has militated against growth in the last 3 years with consumption being impeded which has come in the way of investment too. Most solutions given are medium term and hence in way we are back to falling back on ‘good weather conditions’ to bail us out repeatedly.

Finally, how is one to read these statements? They do appear to be generalized objectives which need not necessarily have to be adhered to as the prevalent economic conditions can always justify a turnaround. Will such agendas sway votes? Probably not, as the electorate is quite savvy and knows what can happen. More so given that a lot of what was promised in the past has not quite been delivered. Is there anything positive about these statements then? Yes, as all of them at least on paper are playing around with economic issues and not the traditional religious or caste props, it shows that maybe we are in the right direction.