Economic Resolution

Economy deteriorating
slowly and steadily

The economic resolution was moved by Prof. Vijay Kumar Malhotra, Deputy Leader of BJP Parliamentary Party in Lok Sabha and unanimously adopted.

The Bharatiya Janata Party has taken serious note of the slowly deteriorating economic situation in the country. It is now more that 19 months since the UPA Government came to power promising more employment, eradicating poverty, keeping the prices down and accelerating economic reform. It is regrettable that UPA Government has failed during this period to make any significant progress in any of these areas. The Indian economy had generated unprecedented growth during the NDA regime under the leadership of Shri Atal Behari Vajpayee. The momentum of this growth and the favourable conditions of huge Foreign Exchange Reserves and low interest rates have kept the growth in the last one year reasonable. However, the policy paralysis of Dr. Manmohan Singh and his team is leading to serious deterioration of the economic fundamentals. True to the fears expressed in the Chennai Resolution of the National Executive, the unprecedented trade deficit of USD 30 billion ( Rs 135,000 crs) has put pressure on the rupee which has fallen by more than 6% in the last two months. The price of gold has also reached heights which has made it beyond the reach of the common man. This is in sharp contrast to the trade surplus achieved during NDA rule and the rising value of the Rupee which added to India’s prestige in global for and was the biggest attraction in attracting foreign investment.

Manmohan Proposes CPM Disposes

The communist parties continue to dictate economic policies. For example whether it be sale of government shares in PSUs, modernization of airports, creation of Pension fund authority, restructuring of banking sector and consolidation of PSU banks, FDI in retail, EPF rate, WTO negotiations we have the strange spectacle of cabinet decisions being put in cold storage because of communist pressure. We also have reservations on the wisdom of many of these and have expressed them here and elsewhere. So much so we witness everyday the pathetic spectacle of a helpless Prime Minister giving lectures on good economics but meekly surrendering to the back seat driving of communists. The people should also be aware that the Congress Party has never believed in economic reform and through the policy of Permit and Licence Raj stifled enterprise and institutionalized corruption and is today caught in a web of its own creation.

This dichotomy between preaching and practice, the inability of the Central Government to continue economic reform and unleash the hidden power of the people of India has seriously affected the national economy, affecting India’s image and the fight against poverty.

Unemployment

As pointed out in previous National Executive resolutions, the UPA Government is paying only lip service to generating employment and reducing this serious issue to a mere vote garnering gimmick. The Common Minimum Programme had promised guaranteed employment for rural, urban and lower middle class households. But now this become an exercise directed at a few rural areas. Even after being in power for more than 18 months, as on date apart from tall talk no new projects have got under way. Social security schemes formulated by the NDA government to reach out to all sections of the unemployed have been put in the back burner. On the other hand grandiose like Bharat schemes like Bharat Nirman and Employment for All are announced without adequate Budgetary allocations.

On the contrary there is evidence to show that employment in the organized sector is falling inspite of economic growth due to poor governance and haphazard policies of income distribution. The worst to suffer is in fact the small scale sector where due to mindless opening up to foreign competition, lakhs of small units are getting closed and throwing people on the streets. The policy paralysis mentioned above have led to a total lack of investment in new areas which alone can generate more employment. This trend if left unarrested would lead to civil strife and social anarchy.

Agriculture

More than 60% of India’s population is dependent upon agriculture but its contribution to remains stagnant at slightly over 20% of the GDP. The farmers continue to be subjected t the twin problems of drought and floods. The vision of the NDA Government to inter-link the rivers has been put in cold storage due to political reasons. Latest reports from the Planning Commission show that agricultural growth in the 10th Plan till date has slumped to a mere 1% per annum.

Rural credit structure remains lifeless and the delivery mechanism of cooperatives and rural banks as also the kisan credit cards are not being used effectively by the UPA government to deliver credit in time and sufficient extent. In states like Maharashtra, Andhra Pradesh, Punjab and others there are suicide deaths of farmers on account of the immense debt burden on them.

Several studies of the Planning Commission have brought out the need to create a national market for food grains so that the farmers can get optimum realizations for their produce. The BJP National Executive regrets to note that there is little progress in this regard. This coupled with the woeful lack of storage facilities have led to miseries for farmers, suicides and made the wastage of agricultural products a national shame.

Its unfortunate that in the recently concluded WTO negotiations the UPA representatives have been able to achieve very little in terms of getting our farmers better access to global markets. They have also been unable to strengthen the protection that our marginal farmers require from the Government against the onslaught of subsidized imports.

Rising Prices

In the last resolution passed in Chennai, the National Executive of the BJP had warned the nation that the mismanagement of the economy could result in higher prices. Last 3 months have confirmed our fears and there has been an increase in prices of various petroleum products like diesel, petrol and cooking gas. It is regrettable that the duties on petroleum products in India is the highest in the world. Not only these affect the poor and the middle class, it has resulted in an increase in the prices of all commodities like food and articles, industrial raw material like coal. Cooking gas was available in plenty during NDA rule but today we have a Government sponsored Gas shortage! Our plea that the high taxes on these products should be reduced has been ignored. The Common man and salaried class are the worst affected.

Connectivity

Realising that connectivity was critical for all round and rapid development of India, the NDA government had embarked on ambitious and time bound programmes for building national highways (PMBJ), the Rural roads programme- PMGSY. The implementation of these have slowed down in most places. The development of ports and airports are also been pushed back due to policy confusion. This will seriously affect national development in the years to come.

Water Resources

The Common Minimum Programme promised that it would provide drinking water to all sections in urban and rural areas on a top priority basis. Unfortunately, the sad truth is everywhere in the country including in the prestigious capital of the nation, there is chronic water shortage. National rivers which are worshipped by all Indians have been converted into poisonous waters through bad governance and we are seeing the dangerous phenomenon of arsenic pollution in the water leading to major health hazards. No projects are getting implemented due to lack of proper policies, corruption and poor governance.

Energy Sector

The UPA Government has reduced the whole of India to an area of darkness. The well calibrated reforms of the power sector introduced by the NDA government have been kept in abeyance by the UPA and the impact of this is for everyone to see. The performance of this crucial sector in 2005-06 has been unsatisfactory as revealed by the latest Planning Commission statistics.. Power production remains stagnant even its demand arises. The story in production of oil and gas is no better and the dependence on imported oil is rising. This performance of the Energy sector will affect economic growth, employment and standard of life.

Savings And Capital Markets

Savings in the economy are stagnating as real returns are not available even from long term bank deposits. This is because the Government is crowding out other players and monopolizing all the savings in the economy. Time limits imposed by the Fiscal Responsibility Act are not being followed. This trend in the economy should be arrested and the Government should show better fiscal prudence. This alone can give savers an incentive to save.

Spokesmen of the UPA Government keep stating that the markets are healthy based on the rise in share prices but facts are otherwise. The stock market has now come totally under the influence of Foreign Institutional Investors (FIIs). While this is the matter of concern for every Indian, what is even more disturbing is that even the Reserve Bank of India has warned of the dangers of the FII route being unscrupulous elements. This is in spite of the JPC on the last Stocks Scam calling for urgent measures to bar FIIs from being used as conduits for illegal funds.

The BJP through this resolution calls upon the Union Government;