Burying Nehruvian legacy, Congress manifesto warms up to private sector

Congress leader Rahul Gandhi at the release of the party's manifesto in New Delhi on 5 April. (AFP)
Congress leader Rahul Gandhi at the release of the party's manifesto in New Delhi on 5 April. (AFP)


The national discourse gains when the Opposition rises to a critical national challenge, such as of chronic unemployment, with constructive ideas. Whoever forms the government after the national election will find useful ideas in the Congress party's manifesto.

The Indian National Congress released its manifesto for the 2024 Lok Sabha election a few days ago. The 48-page document is dominated by economic policy proposals, with a focus on tackling the country’s most pressing challenge—unemployment.

The solution: build India’s manufacturing prowess and raise the sector’s share in GDP from about 14% now to 20%. The manufacturing sector, the Congress party has rightly concluded, is the best fit for productively engaging a bulk of the country’s low-skill workforce.

The Congress wants to make India the manufacturing hub of the world by ensuring the country ranks among the top five global producers in select sectors, especially where we have a labour advantage. 

The party promises an employment-linked incentive scheme (ELI) to supplement the Narendra Modi government’s productivity-linked scheme (PLI), which it proposes to reform. The Congress also promises that, if voted to office, it will remove biases in taxation and industrial policies that favour the use of capital over labour.

The language used is restrained, and skips rhetoric and politics for the most part. Economic policy proposals have been given serious thought, except in the case of agriculture, where the party seems to have given in to populist politics by promising legal minimum support prices to farmers.

That aside, the manifesto’s industrial and taxation policy promises are progressive. They show that the Congress has come a long way from when it was influenced by the ideological leanings of the erstwhile National Advisory Council that was dominated by economists such as Aruna Roy and Jean Drèze, as opposed to the policy preferences of former prime minister Manmohan Singh, and for which the UPA government got a lot of flak.

Unlike previous manifestos, there’s no mention of the public sector, showing it isn’t as important as it used to be to the Congress’s economic approach. The manifesto, in fact, makes it plain that the party wants a much larger role for the private sector, including in large infrastructure projects. Unlike its earlier manifestos, there are no assurances provided against privatization.

The Congress seems to have buried the Nehruvian approach at last—the manifesto takes a remarkably private-sector-and-investors-friendly approach.

A strong, productive and large private sector seems to be the party’s prescription for tackling the economy’s twin inter-linked challenges: unemployment and tepid private investments.

In what will be music to all industries, big and small, the Congress promises a single-rate goods and services tax with only a few exceptions. It proposes to overhaul direct taxation and introduce free-trade policies so that companies can become large and productive. It does not want to continue with the Modi government’s protectionist approach to trade, which is a reversal of the 1991 reforms.

The Congress party’s argument is that it is the political outfit that delivered Independence as well as the liberalization reforms in 1991, and so has experience of making policy “resets" that are urgently needed now to take the economy out of the crisis of unemployment and ensure private investments will revive. It has called this agenda for reset a Nyay Patra (a pitch for justice).

The party insists that the evidence of the success of the social welfare net created by the Congress-led United Progressive Alliance—comprising the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) and the National Food Security Act—is that it enabled India to absorb the shocks of the global financial crisis in 2008 and the Taper Tantrum of 2013.

The Congress proposes to use MNREGA labour for building and strengthening the infrastructure of schools and colleges in villages. The manifesto lays a great deal of emphasis on how it plans to improve the quality of education, given that surveys have consistently shown poor reading and math ability of students. Also included in the manifesto are plans for building skills of the workforce. Colleges and hospitals in every district are proposed. Scholarships, including for sports, are also promised.

There is also a proposal for cash transfers of 1 lakh a year, a Mahalakshmi scheme, to poor families. Free food grains schemes distort production incentives and signals for farmers. Cash transfers, as Mint SnapView has been arguing, are a more sound policy for improving the welfare of the poor.

Populist ideas such as revival of the old pension scheme have thankfully not made it to the manifesto.

The national discourse gains when the Opposition rises to a critical national challenge, such as of chronic unemployment, especially among the youth, with constructive ideas, and in sober-minded language. Whoever forms the government after the election will find useful ideas in this manifesto.

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