Where is the money?

Congress manifesto makes lofty promises

The Congress released its manifesto for the upcoming general election on Tuesday with the hope that it would convince voters to place their trust in the grand old party. But it is unclear if the promises in the manifesto are good enough, as the lofty goals are not backed by any credible understanding about the expenditure involved and where the money would come from. Understandably, the manifesto makes all the right noises about touching all sections of society. On top of the list is, of course, the Nyuntam Aay Yojana (NYAY), under which Rs 72,000 a year will be directly transferred to the poorest 20 per cent households. There is considerable scepticism about whether the proposed minimum income scheme can be implemented effectively, largely because details are yet to be fleshed out.  

For the rural population, the party proposes to increase the number of days available under the Mahatma Gandhi National Rural Employment Guarantee Act from 100 to 150. Farmers have been promised a separate budget to ensure priority to issues affecting the agriculture sector, with the focus being on freedom from loans rather than loan waiver. For this, the manifesto says it will ensure remunerative prices, lower input costs, and assured access to institutional credit for farmers.  Apart from poverty and rural distress, the manifesto focuses on unemployment, and the party said it would ensure 3.4 million jobs in the public sector. For helping job creation in the private sector, it says that “for three years, India’s youth do not need any permission from anyone to open a business”. For women, the manifesto promises 33 per cent reservation in all government jobs across different social categories. In another example of good intention, allocation to education and health will be doubled to 6 per cent and 3 per cent of the gross domestic product respectively. Other important issues covered are correcting the GST regime and scrapping the NITI Aayog and bringing back the Planning Commission. 

The wide range of promises show why election manifestos should be taken with more than a pinch of salt. It is plain to everyone that the government will not have the financial resources to fulfil these promises. What takes the cake, however, is that all this will be done while reducing the Centre’s fiscal deficit to 3 per cent of GDP from 2020-21 against the projected 3.4 per cent in the current fiscal year. It also goes on to state that the party would raise gross investment to 35 per cent of GDP and gross savings to 40 per cent of GDP. Overall, the focus on welfarism without the appetite for hard economic reforms does not inspire much confidence about the manifesto’s central assertion that the “Congress will deliver”. The Bharatiya Janata Party, which is due to release its manifesto soon, could be tempted to counter the Congress pitch by its own long list of populist measures. But the ruling regime would do well to remember that any largesse promised in the run-up to the polls will hamper the next government’s ability to spend on productivity-enhancing reforms that can make a positive long-term difference.