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Previous Manifestos

Chapter 4


Our Swadeshi Approach

Making India a Global Economic Power

THE economic policy-making in the last five decades has been shaped more by dogma than by a rational debate on what suits the country's interests best. In 1950, Congress discarded the Gandhian approach and adopted the socialist pattern without any debate. Now, after the collapse of the socialist paradigm, our entire establishment has defected to the type of free-market system that prevails in the Western countries, once again without any debate as to whether such a system can be wholly transplanted to India. The policies of liberalization, particularly globalization, pursued by the Congress and later by the UF Government have resulted in economic stagnation. What this nation needs now is a practical approach that is devoid of dogma and is guided wholly by considerations of national interest and what is appropriate for us.

Fifty Years of Wasted Opportunities

IN fact, the five decades of Congress and quasi-Congress rule have been a virtually wasted opportunity. In these fifty years the absolute numbers of people living below the poverty line almost doubled; the Indian economy grew at a mere 3.5 per cent while most of Asia raced ahead towards prosperity. At the same time, Indian industry, services and agriculture were largely rendered internationally non-competitive and disadvantaged. During most of this period the BJP and its forerunner, the Bharatiya Jana Sangh, had been urging a liberal economic regime in which the full creative genius of the Indian people could flower. We opposed the license-permit Raj. We opposed the command economy. We opposed senseless central planning. We opposed the inefficient State capitalism that was promoted at the cost of our entrepreneurial class. We opposed the crony capitalism that came about as a result of the collusion between the politicians, bureaucrats and businessmen. We opposed the nationalization of vast areas of the economy. We opposed the corruption that inevitably became a part of the system that was created. We continuously opposed the Congress party that was both the creator and then the creature of this corrupt system.

Phony Liberalization: A More Impoverished Economy

AFTER four-and-a-half grossly wasted decades, the Congress Government of the day woke up to the bankrupt reality, but, under the guise of correcting the past wrongs, actually surrendered to IMF conditionalities. With a gun at its head it began to do what it does best--double talk. It said it was liberalizing the economy and actually gave itself more opportunities for corruption. This phony liberalization turned out to be a period of record loot under which foreign companies flourished and the Indian ones floundered. Within the first year, as the Finance Minister crowed that the surge in the share market was a sign of confidence in his policies, the bubble burst to uncover a scam of record proportions. Foreign companies were allowed to increase their equity at par instead of paying the market price for additional shares. Over 2,100 companies were allowed to raise over Rs. 35,800 crore from the market, mostly at unreasonable premia. The markets have since come down to abysmal levels; as a result millions were financially devastated. More than 600 of these companies, which cumulatively raised over Rs. 10,000 crore, have simply disappeared, walking off with the money. The Congress party has no answer for this. Many in the Cabinet were directly involved in the scams. The then Prime Minister's office, too, was not exempt from this taint.

The last six years, when the much-touted reform has been under way, have been years of extreme difficulty for the common man. The wholesale price index of food grains has gone up by over 70 per cent, which is an effective inflation rate of over 20 per cent. Instead of creating prosperity for all, this so-called liberalization further impoverished the majority with a result that, according to the NCAER, 59 per cent of all households now have a monthly income of less than Rs. 1,000 or about Rs. 200 per person which is much less than the poverty level monthly per capita income of Rs. 263! By contrast, only 4.1 per cent of all families have an income of over Rs. 40,000 per year. A study by Oxfam, while somewhat more charitable as far as the overall figures are concerned, categorically States that rural poverty during the Manmohan Singh years grew from 35.5 per cent to 48.6 per cent. After this period of so-called liberalization and growth, so much hyped by the Congress and later by the quasi-Congress UF Governments, we have become a more impoverished society than before. According to the World Development Report, the highest 20 per cent of Indians accounted for 41.3 per cent of the national income, while the bottom 20 per cent accounted for a mere 8.8 per cent! The hollowness of the economic policies of the past fifty years and, in particular, of the past seven years stands totally exposed by the glaring inequity and the high incidence of poverty.

From 1981-82 to 1990-91 industrial production grew at an average of 7.8 per cent a year. After five years of so-called liberalization it grew at an average of 5.7 per cent. During the period 1990-96, in a reversal of the previous decade's performance, the compound growth rate of foodgrain production was 1.7 per cent while the population grew at 1.9 per cent. Consequently, the per capita availability of cereals, which was 511 grams in 1991, has come down to 464 grams now. It is small wonder that prices of cereals alone have gone up by almost 20 per cent in 1996 while those of vegetables have risen by a huge 63.3 per cent. The prices of wheat and onions have spiraled while those of luxury cars, mobile phones and color TVs have come down. This is indicative of the warped sense of economic and social justice that has been prevailing in our country in the past few years. Instead of waking up to the deteriorating foodgrain scenario, successive Governments have been neglecting agriculture. In 1996-97, the proposed outlay for agriculture was Rs. 1,969 crore or Rs. 349 crore over the previous year's revised estimate. This did not even cover the official inflation and the impact of the Pay Commission's recommendations.

The Swadeshi Approach: Reforming the Reforms Process

IN 1991, the BJP cautioned the Government to embark upon internal liberalization first and defer globalization. We advocated the reinstatement of the Swadeshi idea particularly because of the heavily one-sided pro-West WTO in the offing. However, in a matter of five years, the BJP stand on Swadeshi has been vindicated.

Swadeshi simply means "India First". This is the governing principle of all nations. Now the idea of Swadeshi is being accepted in most quarters, also by the Indian industry. Nevertheless, the economy of India has come under tremendous pressure because of misguided tariff reductions and an uneven playing field for the Indian industry. The BJP is fully aware that, when it comes to power, it will be inheriting a badly managed economy and a badly directed reform process. The broad agenda of the BJP will be guided by Swadeshi or economic nationalism.

The fundamental approach of the BJP is that it is imperative to develop a collective national will and confidence that "India shall be built by Indians". National development will largely depend upon national effort and national capital and savings. Even after the so-called reforms, the share of FDI in national investment is less than 2 per cent, that is, out of the total national investment of over Rs. 12,30,000 crore, FDI amounted to only Rs. 18,500 crore during the years 1991 to 1996. It is clear that foreign capital will be only of little value to the national economy, though crucial to some sectors like infrastructure.

Every nation advocates free trade in all global fora, but, in practice, they compulsively resort to quotas, tariffs and anti-dumping measures to protect their national interests. Whether it is the USA which resorts to Super 301, anti-dumping and high tariff, or it is Japan whose market is very difficult to access even now, the story is the same. While the declared agenda is free trade, the undeclared, but actual, agenda is economic nationalism. India, too, must follow its own national agenda. This spirit is Swadeshi.

Role of Government in a Liberalized Regime

THERE is a great misconception about the role of the Government in a liberalized regime. There is an impression that the Government retreats leaving the hidden hand of the market to manage the economy. Governments all over continue to actively manage and protect their economies, national industry and employment. The paradox is that, the greater the liberalization, the more demanding is the involvement of the Government to protect national industry and employment.

Full Liberalization and Calibrated Globalization

THE Government and Indian industry need to evolve a consensus on the time span required to enable our industries to adjust to the exacting demands of international competition. It means rapid, large-scale internal liberalization, but calibrated globalization so that the Indian industry gets a period of seven to ten years for substantial integration with the global economy. On the basis of this consensus, the Government and the industry should work out a strategy to create an atmosphere of international acceptability and manage external relations, particularly with the WTO.

India must move carefully and gradually towards integration with the global economy and even as it so does, it must act in a manner that suits its national interest. This strategy recognizes that Indian industry needs a period of transition before it can compete with global players. All policies of tariff reduction and lifting of quantitative restrictions will be formulated taking the above facts into accounts, but the objective will be to protect the national economy and national interest like all nations do and not to indulge in economic isolationism.

Study and Appraise the Impact of Reforms on the Economy

THE process of liberalization and economic reforms needs to be properly strategized from the standpoint of broader national interest and rationally phased in. In doing so, the experience of the Asian nations presently under pressure will also have to be taken into account. As we approach the 21st century, we need to institute studies and appraise and review the reforms process and also the proposed reforms and redefine the broad contours of the national strategy for the next ten years. Based on the appraisal, the BJP Government will clearly define the contours and schedule of the liberalization and reforms. The procedural reforms like rectification of corporate law, tax law and other commercial laws will be separated from policy formulation like the policy on insurance and pension funds.

Our Medium-Term Agenda

THE broad national agenda of the BJP, containing an illustrative list of important and priority items for preparing the nation for future challenges, is set out below:

1. India must adopt policies that will enable a sustained 8 to 9 per cent annual rate of growth of GDP. This would mean an agricultural growth of at least 5 per cent a year and industrial growth of at least 12 per cent a year. Without powering agriculture in a big way, Indian growth rate cannot be sustained at higher levels. China, endowed with much less cultivable land and resources, could achieve an average agricultural growth of 8 to 10 per cent a year between 1983 to 1993 and doubled its agricultural production. India can and should achieve this and more. The agricultural agenda should be designed accordingly. A separate agenda for the non-corporate sector, which accounts for 40 per cent of the GDP, should also be pursued to achieve this target of sustained high growth. Recognizing the gross neglect of proper strategy in the past, our Government will focus on a judicious combination of infrastructure and agriculture to achieve a high trajectory of growth.
2. In the next five years, we must become a credible partner in Asia's development process and forge a relationship on equal terms with the major economic powers of the world-USA, EU and Japan.
3. In the next three years, our Government will strive to achieve strong macro-economic fundamentals; fiscal rectitude where, more than fiscal deficit, the revenue deficit is controlled; strong and viable balance of payments; monetary policy designed to resist unrealistic fall in rupee value; moderate inflation; and credit availability to industry.

Some Important and Priority Items for the National Agenda

1. The Government will formulate a system of voluntary compliance with all direct and indirect tax obligations with test-check assessments of select cases and expedite conviction of the defaulters.
2. The Government will ensure a day-to-day working relationship with Indian industry through a structured forum like the MITI in Japan.
3. Even as the private sector will be encouraged to invest in infrastructure, the Government will also invest in infrastructure. The private sector has not been a major contributor in this area. Even in the developed world, the share of the private sector in such development does not exceed 30 to 40 per cent. For this purpose, the Government will:

  • Access the long-term debt market in Insurance and Pension Funds.
  • Set up national-level regulatory bodies for different areas of infrastructure.
  • Bring about more transparency, institute contracts which are easily enforceable and            formulate laws that simplify the procedures.It will also:
  • Cut non-productive expenditure;
  • Disinvest in non-strategic PSUs;
  • Control and rationalize subsidies and trim all except those that benefit the weaker   sections;
  • Reduce the size of the Government; and,
  • Simplify tax laws and widen the tax net.

4. The Government will institute an effective anti-dumping machinery to prevent dumping from
broad and to prevent unfair anti-dumping action against the country.
5. The Government will ensure that a climate of competition is created in the insurance sector             need be, by involving Indian private sector in the insurance business.
6.The Government will rationalize the banking sector by creating specialization in unit banking,retail banking and commercial banking. This will be done by consolidation and           mergers to create global-size banks and promote efficiency and profitability to strengthen the Indian banking system.

Resource Generation: Fiscal Policy and the Promotion of Savings

All the above tasks will need large-scale resource mobilization. This will not only call for the widening of the tax base but also supplementing it with non-tax revenues. The BJP Government shall innovate such resource augmentation through motivated savings. The fiscal policy will aim to prevent the generation of black money. Tax on services will be reviewed.

We will structure a fiscal policy that will help generate a higher level of savings. We will aim to increase the savings rate to 30 per cent in the next five years. Acceleration of savings will require the elimination of dissavings, which, in its wake, will prune the size of Government and the public sector and generate the much-needed resources for attending to the highly neglected areas of social infrastructure like education and public health. Like physical infrastructure, social infrastructure will be a priority on the agenda of the BJP Government. In their abortive zeal for containing the fiscal deficit, previous Governments have cut plan expenditure drastically and, instead, increased revenue expenditure in unpruned regulatory arms of Government which have outlived their utility in the era of liberalization. This trend will be reversed and it is expected that the reactivation of public expenditure will pull the economy out of demand stagnation and recession. It should be recognized that the halt in public investment in infrastructure, both physical and social, in the fond hope that did not materialize, of the private sector making good the gap, has caused undue harm to the economy.

Eradication of Poverty Through Generation of Jobs

THE above strategy is also firmly rooted in the recognition that growth cannot be sustained in the backdrop of accentuation in poverty and human misery. Poverty cannot also be wished away through an abstract definition built on calorific value. A meaningful estimation of poverty will now be structured on the matrix of factors that dilute the quality of life such as illiteracy, lack of sustained employment, malnutrition, lack of shelter, safe drinking water, sanitation and health care. The lot of the poor, thus defined, will be improved through a multi-pronged approach, with the focus on increased employment opportunities. The BJP Government will make the Ninth Plan itself an employment-focused Plan.

The development strategy followed in the last fifty years separates development from employment, treating human beings as fodder in the process of development. Employment has only received lip service in the economic plans; in effect it has received a very low priority. Employment has been treated as a by-product and not the main goal of development. It has been more so since 1991 under the half-baked reform philosophy. The all-West model of the reforms generates only jobless growth. The BJP believes that it is only through full employment--not just any kind of employment, but gainful and productive employment--that rapid and sustainable development is possible. It is through employment that the real purpose of development, namely, the raising of the living standards and dignity of the people, can be realized.

It is distressing to note that unemployment and underemployment-and, consequently, poverty-prevails in our country on such a massive scale. Even when the GDP growth rates have increased, employment growth rates have declined in agriculture as well as in industry. The prevailing employment growth rate is less than half of the rate at which addition to the labour force takes place. The BJP will review the Ninth Plan in all its aspects, with the objective of installing employment as its centrepiece. In the next ten years, over 10 crore people will be provided jobs, besides ameliorating the extensive underemployment and concealed unemployment. Our strategy will consist of the following:

1. A substantially higher growth rate of GDP of 8 to 9 per cent;
2. Emphasis on sectors which offer large potential for employment, including small-scale, artisan-based and rural industries, infrastructure, housing (urban and rural), construction, agriculture, wasteland development and forestry and labour-intensive production;
3. Opting for projects and technologies, wherever choices exist, without reducing productivity, that offer larger employment;
4. Increasing productivity in the informal sector through the support of technology, credit and marketing;
5. Redesigning the special employment programmes--Integrated Rural Development Programme, Jawahar Rozgar Yojana, Nehru Rozgar Yojana, Scheme for self-employment of the Educated Youth, etc.--to increase their coverage and effectiveness;
6. Encouraging the employment of women;
7. Fully involving the private sector and non-governmental organizations;
8. Adopting the institutional approach of cooperatives, wherever possible;
9. Implementing the special employment programmes through panchayat institutions;
10. Vocational training.

Our Commitment: Removal of Hunger and Ensuring Food for All

IN this fiftieth year of Indian independence, we commit ourselves to freeing India of the scourge of hunger. The Indian social traditions abhor hunger and had instituted different social, religious and cultural mechanisms to eliminate hunger. The tradition which acted as a social security against hunger weakened with the advent of colonialism and it never revived after we attained freedom. The result is that hunger has become part of Indian social life. We have to and we shall, ensure that in this land, no one is obliged to sleep on a hungry stomach. For this purpose, we shall explore and encourage all possible ways, both Governmental and societal, of ensuring food for all. As a concomitant of food for all, we shall recast the agricultural policy of the country to increase food production so that India once again becomes the land of abundance in food in next five years.

Public Sector Reforms

CUTTING down of dissavings will be possible only by pruning the public sector and confining it to sensitive areas where the nation's physical or economic security is involved and to residual areas where the presence of public sector is necessary for providing a moderating or counterpoising role to the ill effects, if any, of an unchecked private sector. The minimal public sector will be managed professionally, with least interference by Government. While pruning the public sector, it will be ensured that the interests of workers are duly taken care of. Greater emphasis will be placed on retraining and redeployment aspects of the National Renewal Fund rather than confining its scope to retrenchment.

Role of Foreign Direct Investment

IT is needless to add that national development will be largely funded by capital generated within the country and foreign investment will play only a small role. The per centage of FDI to total investment in India during the years 1991 - 96 is less than 2 per cent and confirms that even in the post-reform period, national development has been almost entirely financed by local capital. However, in areas like infrastructure (particularly energy, roads and ports), promotion of exports and high-technology industries, FDI can usefully supplement national efforts. Policies will be framed consistent with national interest in respect of FDI. The BJP Government will ensure that FDI flows into such priority areas and not in areas where the domestic industry is functioning well. The BJP Government will frame policies to restrict FDI in non-priority areas. FDI will be encouraged to promote exports rather than target the domestic market. FDI is welcome in a non-predatory role in joint ventures rather than in 100 per cent subsidiaries. Generally, the role of foreign capital should be in harmony with and advance, the nation's economic objectives, as also in line with other Asian countries. Again, until the Indian economy reaches a level of global strength, takeovers of existing Indian companies by foreign companies will not be encouraged and suitable, transparent rules will be framed to give effect to this policy. Even developed nations like France, Germany and Switzerland have restrictions on the takeover of domestic companies.

National Agenda for Bhagidari Sector (Un-incorporated Sector)

AN analysis of India's GDP shows that agricultural accounts for 27 per cent; corporate sector 12 per cent; and the Government sector 21 per cent; all adding up to 60 per cent. The balance 40 per cent of the GDP comes from the largest segment of our economy-the unincorporated sector (partnership/proprietorship firms) which bore the brunt of the license-permit quota raj at the cutting edge of its interaction with the organs of State power. Millions of un-incorporated enterprises in the country contributing 40 per cent of our national income did not deserve even a small paragraph in our Economic Surveys and Reserve Bank reports.

This most important segment has so far commanded the least attention and virtually no legitimacy. The entire establishment ignored these unincorporated enterprises which have a share of nearly 50 per cent of national income in the manufacturing sector, a share of 60 per cent in the construction sector, a share of more than 75 per cent in the transport sector, nearly 90 per cent in the trade sector, more than 80 per cent in hotels and restaurants and nearly 100 per cent in the business and other services like that of a doctor, lawyer, accountant, goldsmith, plumber, porter, mechanic, electrician, tailor, barber, carpenter, driver, priest, cook, musician and in the crafts and professions. We neglected this sector (which is clubbed as part of households in our savings statistics) which constitute the largest segment of savers contributing around 60 per cent of our national savings. During 1990-1996 out of the total gross domestic savings of Rs. 11,32,029 crore, the savings by household sector was Rs. 8,94,918 crore, i.e. nearly 80 per cent and the Bhagidari sector is the largest segment of the household sector other than the salary earners.

Any agenda for reform necessarily has to focus its attention on the largest segment of our economy which was also the least cared for during the inspector-raj nurtured by the socialistic regime. But the so-called reforms of the nineties did not address the serious issues of using the phenomenal and enormous savings rate of our middle-class.

The focus of the Government in the nineties, in the name of reforms, concentrated essentially on the corporate sector and foreign investment that came a cropper. A clear understanding and a broad national agenda, with the following measures, are needed for the Bhagidari sector.

1. The financing cost for this sector is phenomenal and they borrow at usurious interest rates. There is no exclusive, national-level financing agency for trade activities or for construction activities. Indian private-sector banks need to be encouraged and developed in these areas and the Government policies should facilitate the same. A separate development bank for this sector will also be considered.
2. There is no social security net for this sector. With changing patterns in the joint family system, there is even more necessity to introduce the same. The Indian private sector insurance companies can provide this. Unless and until the social security net is developed for this sector (of course, from the contributions of this sector), economic reforms will be a castle built on American sands and the European air, but not on Indian soil.
3. In order to mobilize savings of this sectors for targeted poverty alleviation programmes, it would be desirable that full deduction is given for the traditional commitments of the sector, including family obligation and contribution of this sector for temples, mosque, gurudwaras, etc. where free food is provided to poor people daily. This would reduce the leakages in the anti-poverty schemes currently undertaken, since this method would directly deal with the target groups. Local citizens committee can monitor this. The fear of God is a more powerful authority than that of the Government in a country like India.
4. This sector is a target for all levels of the State machinery like politicians, policemen, tax officials and municipal authorities. A national-level awareness programme of this sector's contribution and a national-level law to guard them against State excesses should also be formulated.

This sector has the greatest potentiality to grow with a quantum jump if this agenda is implemented. Any attempt to increase employment and to eradicate unemployment must begin here. This sector at once provides self-employment and multiplies employment. This single sector has the greatest potentiality to attack unemployment, poverty and hunger.

Role of Non-Banking Finance Companies

THE BJP realizes that savings, banking and finance is in the Indian blood. There are tens of thousands of private finance institutions-nidhis, chits and other native methods of augmenting finance and also modern-day non-banking finance institutions. The BJP views this sector as a potentially important one. The policy on NBFCs has been ad-hoc and they have been dealt with, at times, in a reckless manner. The new RBI guidelines preventing NBFCs from accepting deposits without rating is absurd, as we have not even developed standards for rating under Indian conditions. The BJP will review the entire regulation on the NBFCs and bring about an orderly growth and not planned destruction of this important segment. This sector alone finances most of the transportation business and the non-corporate sector, which is the most important and the largest sector of the national economy.

Industrial Policy Reform

THE immediate task of the new Government will have to be to create conditions for industry to regain its lost momentum. Persistence of the present conditions will cause irreparable damage to the fabric of Indian industry. The BJP recognizes the need for corrective action on a war footing. We attach particular importance to the interdependence of industry and agriculture. We will improve inter-sectoral terms of trade and other linkages so that benefits accrue to both. The BJP also reiterates the importance of the small-scale and cottage industry sectors, in view of their contribution to employment, wider participation and new entrepreneurship. These sectors, which have suffered neglect by the Congress and the United Front Governments, will be given all encouragement and support by the BJP.

The permit-quota raj created conflicts between large and small industries. The BJP will strive to make small-scale units and large units, particularly where the former is the supplier of the latter, into a structured ally like in Japan and Korea. The BJP will formulate policies for large units to invest up to 25 per cent in the capital of the small unit so that the small unit has the backing of the large unit for purposes of availing bank loans or other credit. By such a relationship, hundreds of small units can coalesce with a large-scale unit and benefit in a variety of ways.

In order to achieve to above the objective, the BJP will:

1. Further simplify industrial approvals and remove the plethora of restrictive controls that now exist. The Industrial Development and Regulation Act will be replaced by an Industrial Development Act. The role of the Government will change from the restrictive, as it has been so far, to one of extending support and encouragement;
2. Encourage research and development in enterprises as well as in specialized institutions;
3. Permit hazardous industries only in specified areas. Separate satellite industrial parks will be set up exclusively for such units;
4. Give all encouragement and support to the small-scale and cottage industry sectors. Agencies will be established to give them help in getting scarce raw materials, technology upgradation and marketing of their products. Flow of credit to these sectors will be enhanced. We will reconsider the Abid Hussain Committee recommendations on SSI units in the light of the difficulties and apprehensions of SSI. The investment limit of Rs. 3 crore will also be reviewed if any misuse of the higher limit is found. The tiny sector will be relieved of labour laws and other legislations by which they are subject to harassment; and,
5. Ensure a healthy capital market with the twin objectives of increasing capital investment in the corporate sector and of providing protection to the investing public.

Making Labour a Proud Partner in the Nation's Progress

OUR plan to reform the reform process through the Swadeshi approach, includes:

1. A strong commitment to make labour, both organized and unorganized, an equal and proud partner in the nation's progress;
2. Rationalize and simplify labour laws.
3. Recognize trade unions on the basis of secret ballot.
4. Introduce worker-participation from the shopfloor to the boardroom.
5. Strengthen institutional mechanisms to ensure speedy, just and corruption-free redressal of labour grievances.

Policy on Tourism

THE BJP recognizes the importance of tourism as a generator of jobs and foreign exchange. Its Government will:

1. Promote tourism as a way to have a more meaningful and wider understanding of India and its people.
2. Evolve a national policy for tourism to provide needed infrastructure such as hotels, transports and removal of bureaucratic impediments.
3. Create a regulatory mechanism to avoid long-term damage to the heritage and the environment.
4. Take care of the pilgrimage component of tourism by ensuring the cleanliness, basic facilities, etc at pilgrimage centres of all sects.
5. Shift the exclusive emphasis from five-star tourism to tourism for the masses.
6. Enable India to have its rightful share in the growing global tourism industry, while ensuring that Indian culture, heritage and values are preserved and projected.

Policy on Infrastructure

SINCE infrastructure constitutes a critical aspect of the national economy, an overview of the BJP's thinking on infrastructure is presented under:

Policy on Energy and Power

INVESTMENT in power must be accelerated urgently. Any further delay in adding new capacity will inflict considerable costs on the economy.

1. In power generation, most of the private sector investments have got bogged down in never-ending negotiations. The Government will ensure that all eight "fast track" projects start construction in 1998.
2. Transmission and distribution need to be strengthened. After appropriate study, a National and/or Regional Power Trading Corporation may be set up for efficient use of the generated power. Power Grid Corporation's plans to implement a national grid will be speeded up. To ensure that private investors in this sub-sector do not have the same experience as their counterparts in generation, the Government will create a standardized application procedure with clear and transparent rules for their entry;
3. The Government will strive for a national consensus to ensure that, in five years, a commercially viable power tariff structure comes into operation;
4. BHEL will be revitalized to expand its capacity to emerge as a global player in the next five years;
5. The Government will review the liquid fuel policy and institute a more efficient and fair policy regime;
6. To encourage non-conventional sources of energy, the Ministry of Non-conventional Energy Sources and IREDA will be strengthened. Large-scale research and development will be instituted to develop more non-conventional energy;
7. Other things being equal, preference will be given to Indian companies in power generation and distribution;
8. The long-stalled nuclear power programme will be restarted. India has mastered the technology and the entire nuclear fuel cycle. There is no reason why only two nuclear plants have gone critical in the last seven years. Instead of importing nuclear power technology from Russia, there is no reason why our trained engineers should not be exporting Indian nuclear power technology to foreign countries;
9. In the oil sector, the Government will involve the Indian private sector in oil extraction and refining on the explored oil fields and will, on viable terms, allow Indian joint ventures with foreign companies in oil exploration and extraction;
10. In the coal sector, the Government will increase the production of coal, reduce costs and raise productivity. It will involve the Indian private sector in coal mining so as to meet the increased energy needs of the country.


TRANSPORT must become multi-modal to meet the needs of development. The most important type of transport is the Indian Railways. The rate of growth of the Railways has come down. A complete review of the working of the Indian Railways would have to be undertaken along with a study of the use of roads in the areas served by the Railways. There are thousands of kilometers of rail track lying unused, while the roads alongside those very tracks are overburdened with traffic, despite Railways being cheaper.

1. Private participation in using such idle railway tracks will be allowed;
2. An efficiency audit of the Railways will have to be done to prevent wastage and disuse of stores and rolling stock;
3. Also, a study should be done to ensure that trains carry payloads up to 4,000 tonnes;
4. We will institute research and development for the Indian Railways suited to Indian conditions.;
5. Container transport will be encouraged on a point-to-point basis;
6. The Railways will also run pilgrimage specials connecting the several places of pilgrimage in the country both from a commercial point of view and service to the pilgrims, as well as from the standpoint of national integration

Roads and Bridges

INADEQUATE road networks have led to higher transportation costs that have also eroded the international competitiveness of the Indian economy. Trucks in India travel only 200-250 kilometers a day, compared to 500-600 kilometers a day in developed countries. Therefore, proper road construction will lead to a big increase in transport efficiency. For this purpose, the BJP will do the following things:

1. The National Highways Authority of India will be made the regulator for this sector. It will be responsible for setting tolls, inviting bids from private companies, evaluating them and awarding them. The BJP will continue with the current fiscal incentives for this sector. Like in other sectors, it will identify the non-fiscal barriers to investment in this sector, for their speedy removal;
2. The Government will identify the four most heavily used stretches of the national highway system. It will formulate and implement an action plan to upgrade them within two years using both the public and private sectors wherever necessary. It is important that these critical bottlenecks be removed as soon as possible;
3. For all other highways, the Government will invite the private sector to upgrade them, for which they will collect toll revenues. If the private sector is not interested, the Government will create a State-owned National Highway Development Corporation that will go ahead and upgrade these highways, for which it will also levy tolls;
4. A proportion of the taxes on motor vehicles and on petrol and diesel collected in each city will be handed over to that city or town to use to upgrade the roads in those cities; and,
5. Except for very long distance and high investment projects, the policy will be to involve only the Indian private sector in the bids.