Congress Firm On Reforms Path

The Congress partys commitment to economic reforms remains unchanged though there is an underlined emphasis on pro-poor policies.

The economic policy resolution placed before the plenary session did not spring any surprise. However, there was a laboured attempt to prove that the objective of the reforms were growth, self-reliance and increased social justice.

The resolution also reiterates the partys faith in socialism. However, there is a rider. Ours is a dynamic socialism where the interests of the weak and downtrodden take precedence over dogmatic economic models.

The resolution commits the party to restructuring of public enterprises with better efficiency and profitability, establishment of credible social safety nets to protect vulnerable sections of the society, an expanded role for the private sector and competition with foreign companies on a level play ground, disinvestment of a part of government equity in the public sector, reform of banking, insurance and capital markets to mobilise larger resources, and, also the pursuit oof a more efective population policy aiming at population stabilisation.

Spelling out its policy towards foreign investment, the carefuly drafted resolution calls for resaonable incentives for foreign investment not only for infrastructure development and export-oriented activities, but also in the consumer goods sector if it is accompanies by high technology.

Commenting on the losing PSUs, the resolution recommends their sale, if they are beyond scopes of revamping, with preference to workers co-opertatives.

It is counter-productive to go on protecting sick public enterprises if they cannot be turned around at a resaonable cost.

The resolution recommends more resources for the National Renewal Fund to protect the interests of workers who may be affacted by economic restructuring and shifts in technology and demand patterns.

In an elaborate defence of the policy of reforms that the Rao government ushered in in 1991, the resolution says, Reform is not a confession of failure or a rejection of the old; it is a building on the achievements of the past. Thus, change is meshed into continuity.

Recalling the grim economic scanario prior to the policy of reforms, the resolution said that these reforms, on the whole, yielded positive results with increase in national income, rate of industrial growth and rise in exports.

Against financing of exports to the extent of 60 per cent in the late 1980s, it rose to 90 per cent in 1995-96. Larger flows of resources through fiscal restructuring were made available for rural development and anti-poverty programmes.

The resolution predictably talked of a weakening of the development momentum after Congress went out of power.

The fundamental problem being poverty, the resolution aims to again commit the Congress party to work for speedy removal of poverty.

The party recognises that private investment in infrastructure areas is not possible without adequate returns. It favours establishment of independent regulatory authorities for the infrastructure sector to lay down transparent rules governing entry and tariff fixation.

The resolution favours amendement to the Urban Land Ceiling Act to facilitate housing projects. It also recommends land reforms. The scope of public distribution should be limited to those who truly need the state subsidy.