Congress election manifesto: Several poll promises will meet implementation hurdles; strict follow-up action key to success of schemes
The manifesto also talks about more public sector bank mergers which will depend a lot on how the Bank of Baroda-Dena-Vijaya Bank alliance works out as there will be several lessons to be learnt.
The party has promised to allow people to set up enterprises without any permission for the first three years
The promise on spending more on education is commendable but the output quality is important
The decision to do away with electoral bonds is surprising as this is a cleaner way of approaching the issue of funding of any party
Does anyone take elections manifestos seriously? This is pertinent because it is usually understood that parties like to promise all the goodies when going to the voter. But once elected, the language changes to reality where harsher aspects are highlighted and people are asked to make sacrifices for the larger good. While the poor always find themselves at the centre of manifestos, the rich are often blamed and the middle class is given the skip. This is an admission that there are more not-so-rich people in the country!
Does the Congress manifesto have anything new to offer? The answer is probably no, because most of the announcements made are high on the agenda of all parties but articulated in a different style. When one looks at all the good things promised, the first question which comes to mind is whether or not we have the money to pay for it. Here, it is assuring to know that the manifesto has indicated that the party would be on the fiscal path of 3 percent deficit by 2021. This is credible and to make it feasible, all the other promises have to work around this number.
The cash transfer of Rs 72,000 per family per annum is now going to be attained over a period of time i.e., two years and more importantly, will be shared with the states. Hence the full cost of Rs 3.5 lakh crore will be over a period of time and shared with states. This means there is no case of merging existing schemes to accommodate this expenditure. It will require to be seen whether (like the PM’s Ayushman scheme) states have to sign up for the Nyuntam Aay Yojana (NYAY) scheme or whether it would be automatic. More likely, states will have to independently sign on.
The manifesto speaks of creating 10 lakh jobs. Now this number has to be a derived figure based on how the economy progresses and pushes up the demand for labour. It cannot be in the government per se and hence is quite a hypothetical numbers.
This is a mistake which all parties make when they talk of such numbers because if the economy does not perform in five years, they will be in a tight spot when they reach out to the electorate next time.
The bureaucracy is already high with accompanying commitments like pensions which are increasing. In such a situation, both the Central and state governments are going slow on recruitment. Therefore, jobs have to be created in the private space.
Continuing on this track, the party has promised to allow people to set up enterprises without any permission for the first three years. This is easier said than done as there are several state and local laws that have to be adhered to and are outside the purview of the Centre.
In a federal structure, there are limits on what the Centre can take on. Hence, while the idea is good as it makes doing business easier, in practice, the compliance with local laws can still be cumbersome. This is where states need to be more open and liberal and the state rankings initiated by the present government are pertinent.
The party has also spoken about increasing the number of days under Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA) to 150 days. But, if one looks at the scheme so far, notwithstanding the higher allocation, the number of days actually used by the targeted population has been just about 50 days per household on an average basis. This being the case extending it to 150 may not make a material difference as there is limited access to such jobs for various reasons.
Similarly, the promise on spending more on education is commendable but the output quality is important as often education outlays have been more on quantitative achievement than quality. As a result, there has been a tendency for schools to be set up without teachers or furniture.
Even the more successful Swachh Bharat scheme has run into problems after toilets were constructed but not used due to absence of water supply, lights, doors being stolen, security issues, etc. Therefore, this has to be looked at closely and the programmes must be well-crafted with end-to-end solutions. The governments in the past have taken steps to have more AIIMSs and IITs but the result has not been always positive as there are instances in the former where the students, who become doctors, have never seen patients.
Therefore, most of the content, though admirable, could have been taken from the past and for success requires careful follow-up action. The manifesto also talks about more public sector bank (PSB) mergers which will depend a lot on how the Bank of Baroda-Dena-Vijaya Bank alliance works out as there will be several lessons to be learnt.
The decision to do away with electoral bonds is surprising as this is definitely a cleaner way of approaching the issue of funding of any party. Unless there is a more transparent system that is used as a substitute, there is the lurking fear of black money returning the system.
While the party has been cryptic of the GST, the fact remains that the tax is still evolving and the present government has been very open to addressing all concerns right from the procedures to the rates. This has been also at the cost of revenue collections.
It would be interesting to see what kind of an alternative is brought in its place. Ideally, the system needs to be fine-tuned regularly to ensure that we arrive at the right structure. This was a conscious decision taken by the National Democratic Alliance (NDA) government for this complex structure in a complex economy. Rather than wait to create the perfect model, it started off modestly and has gone through a transformation continuously so as to move towards a more acceptable structure.
If there is one thing that stands out as unique, it is the idea of an agriculture budget. This makes sense as there are lots of provisions in the budget which relate to the farm sector. Ideally, a rural budget would make more sense as it can address all the issues of the community. This is surely a thought worth munching on.
(The writer is chief economist, CARE Ratings)
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