Economic Situation: Achievements, Opportunities, Challenges, and Tasks
The National Council of the Bharatiya Janata Party appreciates the performance of Hon'ble Prime Minister Shri Atal Bihari Vajpayee and his Govt. for managing India's economy well since assuming office in March 1998. Nearly two-and-a-half years later, the economy presents a picture of some solid achievements, many opportunities, and notably, several daunting challenges. The National Council urges the NDA Government to consolidate the successes, take bold and speedy steps to transform the opportunities into new successes, firmly tackle the many existing problems in the economy, and prepare the country to face the formidable challenges emerging on the horizon.
India has begun its journey into the new century on an ambitious note. The Prime Minister, in his visionary address to the nation on Independence Day, has given a call to make the next ten years the Decade of Development. Towards this end, he has set a target of doubling the country's per capita income by 2010. This implies increasing our economy's yearly growth rate from the present 6.5 percent to 9 percent on a sustainable basis for the next ten years. The BJP is confident that this will generate the targeted one crore additional employment opportunities each year and help us to win our war on mass poverty within the foreseeable future.
Besides, this will lay a strong foundation for the country's all-round development in the coming decades so that we can redeem our slogan of "Making the 21st century, India's century". The BJP fully endorses this call and urges all sections of our society - our kisans and mazdoors, our artisans and craftsmen, youth and intellectuals, our entrepreneurs and professionals, our scientists and engineers, our administrators and people's representatives - to harness our collective energies to make this happen. The party urges the Government to use science and technology as an effective means to fuel the engine of growth.
Agriculture and rural development are the key to the realization of faster growth of our economy. Since the last National Council meeting in Chennai in December 1999, the Government has taken many steps to translate the policy measures suggested in the Chennai Declaration. The Union Budget 2000 - 2001 has increased the focus on agriculture and rural development. The Government has introduced several new schemes, and suitably revised the earlier ones, for poverty alleviation and employment generation like the Pradhan Mantri Gramodaya Yojana, and micro-enterprises. Many welfare schemes aimed at providing succor to the poorest of the poor, like the Janashree Bima Yojana, Sarvapriya Yojana, and increased food allocation in the Annapurna Yojana for senior citizens, have also been unveiled, which is in tune with BJP's commitment to Antyodaya i.e. upliftment of poorest of the poor. The party also asserts that in the economic planning of the Govt. Antyodaya should be the touchstone for evaluating the performance of the Government in the economic field.
The National Council welcomes the announcement of the National Agricultural Policy, which is the first of its kind since Independence. This fact alone suffices to show the gross neglect of Indian agriculture during the Congress rule. The policy has a target of 4 percent yearly rate of growth in farm production. This is ambitious, but entirely realizable. One can only imagine what higher levels of productivity and prosperity they can achieve for themselves and for the country, if they have the benefit of a proper policy and appropriate programmes. The party considers that food security is an important ingredient of economic development. The BJP urges the Government to quickly convert the many laudable objectives in the National Agriculture Policy into specific time-bound programmes and prepare a strategy for their effective implementation.
In particular, the Government should take immediate initiatives to remove all restrictions on the movement of agricultural commodities throughout the country. The Party urges all the State Governments to fully back the creation of a nation-wide internal farm market, which will benefit both kisans and consumers. The prolonged and chronic neglect of agriculture in rainfed and backward areas must end through innovative technological and financial measures. Also, the Government should speedily implement the many schemes announced earlier - such as Irrigation projects, Kisan Credit Cards, crop insurance, enhanced agricultural credit support, watershed development, flood control mechanism, cold storage facilities, etc. The party notes with concern about the receding waterbed level. Therefore effective corrective measures should be taken. Water harvesting should be given top priority.
Volatility in production and uncertainty in the prices of certain agricultural commodities has severely affected our farmers. Periods of acute shortages, often necessitating imports, are followed by gluts that see a slump in prices, storage and transportation bottlenecks, and grossly inadequate opportunities for exports. The best example of this is the current situation in sugar. The Party urges the Government to prepare a comprehensive long-term strategy to address these problems and boost exports in a sustainable manner. We also urge our kisans to take advantage of the opportunities of the rapidly growing global market for primary and processed farm produce by practicing better crop management, and using greater inputs of science and technology particularly, for food processing industry.
The National Council applauds the decision to provide Rs. 5,000 crore this year for a new Pradhan Mantri Gram Sadak Yojana to link all villages with all-weather roads before 2007. This is the first time that the Centre has taken a major initiative in improving rural connectivity. It is also for the first time that as much as Rs. 2,500 crore is sought to be raised each year from the capital market for this vital rural infrastructure. This will not only facilitate the movement of goods and people and accelerate the rural economy, but also generate employment opportunities. The Party urges the Government to ensure the effective implementation of this project with the active cooperation of State Governments and Panchayati Raj institutions. Due attention should also be given for promotion of cooperative movement, especially in the areas of cottage industries.
The unorganized sector and traditional industries are the second most important pillar of our economy after agriculture. Since a majority of the people engaged in these industries and self-employed activities belong to the Scheduled Castes, Scheduled Tribes, and Other Backward Classes, this is where Economic Justice and Social Justice are closely inter-linked. The Party calls upon the Government to implement the proposed Deendayal Upadhyaya Hathkarga Protsahan Yojana to promote the handloom sector, revive the other areas of our textile industry and reactivate the Khadi and Village Industries Commission. The Party would also like to draw the Government's attention to the challenges that the small-scale sector is facing after the removal of quantitative restrictions (QRs) on imports based on the commitment to the WTO made by the previous Congress Govt.
Unless effective steps are taken, the removal of QRs is likely to have an adverse effect on many domestic producers - especially in agriculture and small-scale industries. The Party appreciates the Government's decision to impose 35 percent import duty (bound rate ranging up to 100 percent for food grains) and also its decision to re-impose import restriction if any of the domestic producers are adversely affected. Rather than leaving it to affected individual parties to bring forward their complaints, the Government should pro-actively defend India's interests before the WTO, by cutting down inter-ministerial procedures and delays and enact laws in this regard. For this, special cells should be set up in the Ministries of Agriculture and Small-Scale Industry to continuously monitor the production and market situation and ensure effective anti-dumping measures on their own. In this context, the National Council appeals to the Government to assess the impact of globalization in general and liberalization of imports in particular on the Indian economy and take corrective steps on time.
We are happy that a National Convention on Small-Scale and Cottage Industries is being organized on August 30. We urge the Government to announce, among others, the following initiatives to strengthen this large and vital component of our economy: 1) Credit guarantee to the small-scale sector units without mandatory collateral up to a certain level; 2) Facilities for technological upgradation; 3) Marketing support and 4) An enabling atmosphere for the small-scale sector to enter the 21st century full of self-confidence. The party supports such economic reforms which would give a great boost to the economy.
The slow pace of infrastructure development continues to be an area of major concern. The Party commends the Government for its many bold decisions to reform the telecom sector and to promote IT in India. However, the same pace is required in other infrastructure sectors like power, roads, railways, ports, and airports. Without adequate power, there is no way we can achieve our desired objectives in agriculture, industry, and services. The Party urges the Government to prepare a crash programme to remove all bottlenecks in power generation, transmission, and distribution with the active involvement of State Governments.
A Golden four-arm scheme linking Delhi to Mumbai, Calcutta and Chennai with a 6000 km long 4 to 6 lane highway is underway. Similarly an ambitious highway development scheme in the name of National Highway Development Scheme to connect Srinagar to Kanyakumari and Silcher to Porbandar with a 7000 km long 4 - 6 lane highway also is underway. National Council is extremely happy to note that these two schemes are progressing well and will get completed two years ahead of its scheduled time. Contracts would be awarded for more than 5000 long length of highway within a year.
The Council expresses its happiness over another noteworthy scheme going for an interstate waterways which is the cheapest mode of transport. This is an innovative step. Arrangements are being made to begin with, a National Waterways - 1 that is to link Allahabad with Haldia in River Ganges for a distance of 1650 km from the 1st of October, 2000. This will enable not only goods transport but also other transports. This will provide jobs for thousands of youth. Efforts are also on to have goods transport over other waterways.
The slow expansion and modernization of our railway network is a serious hurdle in the path of faster economic development. It is also critical for removing regional disparities. This is a source of widespread discontent. The resources of the Railways are severely limited. Therefore prioritization and railways expansion in the left-out backward area is the need of the hour. The Party, therefore, urges the Government to evolve a new long-term policy on the development of Indian Railways, with the active participation of the private sector and the State Governments.
The Party urges the Government to speed up its efforts to increase revenues and drastically curb unproductive Government expenditure. There is a need to reduce the size of departments and offices that are either over-staffed or obsolete, both in the Centre and in the States. This is necessary if more resources have to be channeled for economic and social development. In this context, the Party feels that there should be an all-round consensus to accomplish this through a proper strategy of compensation, retraining, and non-governmental re-deployment.
The efforts to make our PSUs commercially viable brook no delay. The State has played and will continue to play a vital role in country's development. From directly providing goods and services, in the coming decades, it will focus on enabling the private and cooperative sectors of society to provide them, and in its turn, it will focus on providing infrastructure as well as basic minimum services - drinking water, primary education, health, housing, and nutrition. The Party notes with satisfaction the initiative of the Government to involve local bodies like Gram Sabhas and voluntary organisations in the social sector development.
Disinvestment is an instrument for transforming one set of assets - many of which have sadly become unbearable drains on the public exchequer - into more productive assets, and of redirecting the State's role in the economy. It is an imperative of the times. The Party therefore endorses the steps the Government is taking towards disinvestment. Simultaneously, it calls upon the Government to ensure that: every step in the process is transparent; every effort is made to protect the interests of workers; the public sector continues to have an effective presence in strategic sectors; while selecting purchasers or strategic partners for vital national assets, other things being the same, preference is given to Indian entities; and wherever necessary, effective regulatory mechanisms are put in place before the Government reduces its presence in a vital sector.
Our core industries such as steel, textiles, cement, sugar and jute and chemicals and fertilizers continue to face many problems. These problems are getting aggravated because of globalization. The Party urges the Government to study these comprehensively and take necessary measures for their continued growth. Another important area of internal liberalization where immediate action is needed, is the tardy pace of removal of unnecessary restrictions and controls that allow the Inspector-Raj to continue to throttle our businesses, especially small businesses. These breed corruption and waste the precious time and resources of our entrepreneurs who ought to be devoting these to improve their quality and productivity to face the new challenges.
The country imports 70% of crude oil requirements. The prices of crude oil have reached an all time high in the last ten years from US $ 10 per barrel in the beginning of Jan. 1999 to US $ 32.50 - a 225 % increase. The indigenous exploration and production of crude oil and natural gas, therefore, need to be given greater impetus. Inspite of these problems, the supply to LPG has been stepped up to liquidate the waiting list of 1.10 crore by the end of Nov. 2000. This figure compares well with 4.25 crores connections given during the last 40 years. Efforts should be made to cover the rural area as early as possible. The Government's programme of increasing the number of Retail outlets and LPG Agencies by over 5,000 outlets would help to achieve this objective.
A long-term energy generation and management is overdue. Meanwhile, the National Council urges the Government to quickly evolve a major strategy for conservation of diesel and petrol. Simultaneously, alternative sources of energy such as ethanol, upgradation of coal washery technology, co-generation of power from sugar mills, etc. should be harnessed on a war footing. In short, all-out efforts must be made to mitigate the effect of India's rising oil import bill.
Swadeshi, Swavalamban (self-reliance) and decentralization will continue to be the guiding principles of India's economic development.
Some Major Tasks before the Government
In conclusion, the National Council calls upon the Government to focus its attention on some of the following immediate tasks:
1) Expedite social sector development like safe drinking water, health care, and primary education.
2) Remove all restrictions on the nation-wide movement of agricultural products by amending the Essential Commodities Act.
3) In view of the burgeoning food stocks and severe constraints in their safe storage, the Government should start a Food-for-Work programme in collaboration with State Governments.
4) The functioning of PDS should be revamped so as to benefit poorest of the poor and daily wage earners. In this context the party suggests purchasing power linked PDS distribution.
5) Ban on slaughter of cow and its progeny should effectively be implemented and ban should be imposed on export of cattle meat.
6) Schemes like crop insurance, kisan credit card, and welfare programmes like the Annapurna Yojana, Sarvapriya Yojana, Janashri Bima Yojana, and rural development programmes including the newly announced Pradhan Mantri Gram Sadak Yojana should be properly implemented. Steps should be taken for setting up "Kisan haat" at block level.
7) Expedite implementation of measures like setting up cold storage, food processing industries etc. so that farmer can get remunerative prices for their producte.
8) The Government should announce a package of effective measures to protect and rejuvenate our small-scale and cottage industries, in view of the WTO regime. Special efforts should be made towards upgradation of technology.
9) The National Highway Development Project should be completed on time.
10) Potentialities of waterways be explored and expedited.
11) Remove all bottlenecks in the power sector and ensure that at least half a dozen major power projects start construction soon.
12) A new policy for the development and modernization of Indian Railways, with a substantial role for the private sector and the State Governments, should be immediately formulated.
13) Effective measures should be taken to minimise non-performance assets (NPAs) -- if necessary by amending the existing banking and company laws.
14) The Government should take innovative and urgent steps to remove the "Digital Divide" by promoting IT for the benefit of the masses. The first priority of telecom reforms should be to ensure universal rural connectivity through reliable media before the end of 2002.
15) Steps should be taken to ensure greater inflow of Foreign Direct Investment in areas where FDI is necessary. However, the Government should take care that foreign companies set up greenfield units, and are not allowed to acquire existing Indian companies and that too with money raised from the Indian capital market.
16) In view of the serious challenge of our rising oil import bill, the Government should quickly put in place a nation-wide campaign for conservation of petroleum products and to harness alternative sources of energy.
17) Efforts should be made to reduce interest payments burden by stepping up repayment of debt -- with the target of making the country debt free.
18) The Government should fix a minimum target in each of its economic ministries to be achieved before March 31, 2001, in the programmes already announced.
19) Government should create an effective and easy mechanism for registering patents.
Tasks before our Party
The National Council notes that the prevailing economic situation imposes many economic tasks before our Party workers, too. They should understand, and in turn should make the people understand that the NDA Government has inherited many complex problems in the economy, which were the result of the wrong policies and programmes pursued by the previous Governments. They should especially impress upon the people that the accumulated problems of the last few decades cannot be solved in a short time. They should also educate the people about the temporary and transitional problems as India moves from a largely State-controlled economy to a more vibrant and strong People-driven economy.
The party will mobilize people's participation in monitoring and implementing the Government's various programmes. The party will also present constructive ideas and suggestions to improve the Government's performance.
The National Council firmly believes that only closest possible partnership between the people, the Party, and the Government can ensure the success of the great mission of economic reconstruction that our country has embarked on.