Vague economic vows

Election manifestos of political parties contesting the ongoing Lok Sabha elections seem to have one thing in common. None of them, including nationally present BJP and Congress, produced an economic manifesto, clearly specifying economic goals that will push industrial investment, create new employment and income for millions of the country's unemployed youths in the coming five years. Domestic industrial investments witnessed a downtrend for almost seven consecutive years. Imports are galloping. The last five years saw a very week export growth compared to the previous 10 years. Imports are taking away domestic jobs. None of the major political parties seems to have plans to tackle it. New project investments have been the lowest in 12 quarters at about Rs 1 lakh crore for the quarter ended December 31, 2018, data from the Centre for Monitoring Indian Economy (CMIE) showed. This number is the lowest in 14 years, since mid-2004. Economic manifestos are practically blank on such matters.

BJP's election manifesto, promising investment of Rs 100-lakh crore in infrastructure over the next five years and pension to marginal farmers seem to be over-ambitious. Experts say that the promises if implemented would have a huge impact on the country's exchequer. The slowdown in several economic indicators adds the scepticism towards the actual implementation of such decisions. The party's Rs 100-lakh crore investment resolution by 2014 in the infrastructure sector raised eyebrows in many quarters.

Expressing astonishment over the promised investment, N R Bhanumurthy, professor at National Institute of Public Finance and Policy, said that it is unrealistic as the amount is over 50 per cent of the country's current GDP.

Former chief statistician Pronab Sen said that the political parties do not actually tend to spend the money they promise in manifestos. During the budget presentation, they would come out with more pragmatic proposals. BJP reiterated its promise to double farm income by 2022, extend PM-KISAN scheme to all farmers, and give pension for small and marginal farmers. The 'Sankalpit Bharat, Sashakt Bharat', also pledged an investment of Rs 25-lakh crore to improve productivity in the farm sector.

The Congress party's economic manifesto is equally ambitious and unclear. The biggest takeaways from the manifesto are Congress's flagship scheme NYAY that promises to eliminate poverty by 2030 and gives assurance to fill 22-lakh job vacancies within the government to boost employment. Few will disagree that the government is over-employed. A substantial portion of the government's expenditure is now spent on administrative expenses, including massive salaries and perks to employees and payments towards pensions. Why does it want to further burden the government and its budget expenditure by filling up 22-lakh job vacancies? Why not expand industry and trade and minimise imports? Why talk of 2030, when the next government's life ends in May 2024? A key focus of NYAY (Nyuntam Aay Yojana), according to Congress president Rahul Gandhi, is: "Garibi pe war, saal me 72,000 hazar (War on poverty, Rs 72,000 per year)". The party has promised to create a new ministry of industry, services and employment in its bid to underline the link between the growth of the industry and services sectors and rapid creation of jobs. Congress has also promised to create 10 lakh jobs in gram sabhas. But, it is silent on how to pay for these jobs and the benefits they will bring to taxpayers.

Few political parties had undertaken any serious background research on what ails the economy, reasons behind the slowdown in industrial investment, impact of new technologies such as artificial intelligence (AI), robotic process automation (RPA), IoT, blockchain, digitisation and machine learning on India's industry and the future job market. More importantly, there is no mention of how the next ruling political party wishes to exploit India's attractive consumption-oriented market with the high growth of the middle-class and rising disposable income. According to NRI Consulting, an affiliate of Japanese major Nomura Holdings, only 15 per cent of what is consumed in India is made by its domestic manufacturing industry, limiting the country's ability to create employment opportunities. It said that micro, small and medium enterprises (MSME), if nurtured well, can bridge the gap and create 10 million jobs in the next 4-5 years.

"This could be done by following a market-oriented approach for MSMEs, wherein organised private sector participants invest in capacity building of the MSMEs against a valid for-profit business case with long term benefits," the research firm said in a note on the Indian market, amid the political debate on jobs and joblessness. The MSME sector remained the highest job provider creating almost 36 million jobs, which was about 70 per cent in the entire manufacturing sector in 2017-18. "A deep dive into product groups manufactured in various clusters in India suggests that a dedicated focus on developing these MSMEs can create additional 7.5 to10 million employment opportunities in the next 4-5 years through partial substitution of imports," Japan-based NRI Consulting said.

However, not many in the BJP-led government seem to have any idea about the time it should take to make the so-called 'Make-in-India' drive successful and productive. Reckless imports of consumer goods and industrial products — from steel, automotive tyres to consumer electronics — have turned many of our MSMEs sick. For a specific instance, India's top three homegrown mobile phone makers posted an accelerated fall in revenue in FY18, accounting for less than a quarter of the sales value generated by their Chinese rivals, Registrar of Companies filings show. India's poll-bound political parties may not be interested in such details for preparation of their economic manifestos. Marketing unemployment 'doles' appears to be easier, catchier and a more favourable option than creating viable employment opportunities. Wish political parties questioned why India's industrial growth fell to its lowest in 20 months last February.

(The views expressed are strictly personal)