HVK Archives: BJP's classless reform plank
BJP's classless reform plank - Financial Express
Editorial
()
9 April 1996
This article is from an earlier date. It is being sent to
indicate the thinking of the author at that time.
Title : BJP's classless reform plank
Author : Editorial
Publication : Financial Express
Date : April 9, 1996
Bharatiya Janata Party's ambitious economic agenda is to
reform the IMF-inspired reform strategy marshalled by the
Congress administration. BJP's election manifesto is all
for liberalisation, for minimising the commercial
activities of the government and for a severe cut-back in
the size of the bureaucracy. It commits the party to the
flowering of the free market. And, yes, BJP espouses
swadeshi, not chauvinism.
The party recognises that "foreign investment will be
required for world class technology" and promises to
"encourage" it. This is not the simplistic "potato chips
versus micro chips" line ridiculed by those who love to
hate this challenger to Congress hegemony. The BJP
seriously (and correctly) believes that foreign direct
investment will be scarce in relation to India's growth
ambitions. The country must, therefore, rely on
accelerated growth savings. The manifesto points to the
high savings rate (35-40 per cent of GDP) of late
starters in the growth race which have overtaken India.
It laments the reform strategy of the Congress which has
let domestic savings stagnate to encourage consumerism.
The BJP disagrees with the Congress strategy of diverting
scarce domestic savings into speculative channels,
neglecting infrastructure and increasing the reliance on
foreign savings (investment) for tigerising India's
growth. This comprises the "nation's long-term
interests", states the manifesto, underscoring its
abhorrence of dependence. The BJP promises to introduce
full-fledged VAT and a tariff structure to ensure that
the "domestic sector gets a level playing field, and does
not become uncompetitive". This should warm the cockles
of Rahul Bajaj's heart: at the risk of being considered a
pariah, Bajaj has consistently articulated the Bombay
Club's dismay over a policy that gives domestic
investment the short shrift. The BJP wants the domestic
initiative centre-stage.
Reform yes, but not one that is anti-poor and pro-rich.
Thus, the manifesto wants a well-focussed public
distribution system, a well-defined role for trade unions
recognised on the basis of secret ballot, a hike in the
income tax exemption limit, a strategically positioned
public sector; and no zero tax companies. Reform must
encompass agriculture - there is to be no removal of the
fertiliser subsidy - and accelerate rural development
above all. The urban bias must go. These, and many other
promises, further a strategy of forging the widest
possible coalition of interest groups. The BJP is thus
making a bid for the space the Congress recklessly
vacated in the hope that trickle-down would cover up its
default.
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