Congress, BJP manifestos strengthen mai-baap sarkar syndrome, but paternalistic State is biggest hurdle to growth

Late on Sunday night, Arihant Panagariya, a public policy student at Columbia University, tweeted: “This election in a nutshell: Congress makes you want to vote for the BJP. And BJP makes you want to vote for Congress.”

This was much before the BJP unveiled its manifesto — or the pledge document, as it prefers to call it. After comparing what the Sankalp Patra had to say on the economy with what the Congress manifesto did last week , one is tempted to put out a similar tweet. Sure, both documents are different. Congress Will Deliver is replete with promises, which is natural for a party which wants to come to power. Sankalpit Bharat, Sashakt Bharat has more chest thumping about achievements, which, too, is natural for an incumbent party that wants another term. Beyond that, neither give any indication that India’s two main political parties have figured the recipe for economic growth right. The promises made in both documents strengthen the mai-baap sarkar syndrome, leading to the inescapable conclusion that the two parties either do not recognise or are unwilling to admit, that it is this paternalistic State that is the single biggest hurdle to economic growth. How different is the Congress promise of setting up a Ministry of Industry, Services and Employment from the BJP’s pledge of a National Traders’ Welfare Board? [caption id=“attachment_6413041” align=“alignnone” width=“825”] Prime Minister Narendra Modi with BJP president Amit Shah at the release of party manifesto. Reuters[/caption] Take the burning issue of employment. In terms of optics, the Congress scores because its manifesto not only leads with the issue but also devotes five pages to it. In contrast, the BJP document appears to gloss over it, with two paragraphs in the context of the youth in the section on good governance. But can one honestly say that the Congress promise of setting up a ministry, protecting existing jobs, creating seva mitra positions in urban and rural local bodies and massive expansion of education and health spending is the ideal way of going about it? Both documents talk about encouraging high employment sectors. The BJP says it will provide “more support” to 22 Champion Sectors, but remains silent on what this support involves. The Congress says it will reward businesses in certain job-creating sectors that create new jobs by lowering the effective direct tax rate and lowering the contributions to the CSR (corporate social responsibility). What this is going to do really is create avenues of lobbying and corruption. It is worth noting that both parties do not talk about identifying the regulatory issues that are holding back these sectors and removing them. [caption id=“attachment_6413071” align=“alignnone” width=“500”] Priyanka Gandhi Vadra at the launch Congress election manifesto for the April/May general election in New Delhi. Reuters[/caption] Both the BJP and Congress promise to unleash entrepreneurship as a way to encourage employment generation. The Congress plan is somewhat vague — ‘support entrepreneurs to replicate tried and tested models of businesses’. The BJP promises more schemes, including one to provide collateral-free credit up to Rs 50 lakh. The lack of collateral and the insistence of banks on this has, indeed, hampered the flow of credit to entrepreneurs but how this scheme is structured remains to be seen. On the other hot-button issue is agriculture which the two parties rely heavily on the welfarist approach. The Congress manifesto appears to make the right noises by talking about karz mukti (freedom from indebtedness through remunerative prices, lower input costs and assured access to institutional credit), instead of just karz maafi (loan waiver). This would have gladdened the heart of the late Sharad Joshi, the libertarian farmers’ leader, but it’s not clear how a separate ‘Kisan budget’, a National Commission on Agricultural Development and Planning and another Commission on Marginal Farmers and Agricultural Labour will take this forward. The BJP document, too, is more about largesse – expanding the Pradhan Mantri KISAN scheme to all farmers and a pension for small and marginal farmers (its response to the Congress’ NYAY scheme), zero interest loans up to Rs 1 lakh, among other things. What farmers need is more freedom, but that is not given enough emphasis in both documents. Both parties talk about building more warehouses and cold storage facilities but the Congress manifesto scores when it promises to repeal both the Agriculture Produce Marketing Committee (APMC) Act and the Essential Commodities Act. These two laws were major hurdles in private investment in storage facilities, the lack of which was the main reason for post-harvest losses. The BJP document is silent on both. Some similarities in the two documents are, however, reassuring. They both talk of simplifying GST (though the BJP is silent on a single rate, which the Congress promises), easing regulatory compliance for small and medium enterprises, digitisation of land records and titles (a very important prerequisite for many agricultural reforms as well as subsidy payments and direct benefit transfers) and give a big push to infrastructure. For the economy’s sake, one can only hope that whoever comes to power concentrates on these positive measures, instead of the more populist and bureaucracy-reinforcing ones. The writer is a senior journalist and author. She tweets at @soorpanakha