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Cong for social welfare, BJP for industrial reforms: experts

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Maulik PathakVinay Umarji Mumbai/ Ahmedabad
Last Updated : Jan 20 2013 | 8:47 PM IST

Even as the stakes are being weighed on who would form the next government, management experts feel that if Congress-led government is formed at the Centre, social welfare sector will get a major thrust while a BJP-led government will mean more impetus to industrial reforms. The equations would take change completely in case a third front forms the government.

“If UPA comes to power, industries dealing in agriculture, fertilizer and irrigation equipments will get a booster. There will be more focus on rural people. The new government would emphasise on increasing growth rate and a third stimulus package could be on way,” said M B Athreya, a well-known management advisor.

He said that NDA would on the other hand focus more on industrial growth, reduce interest rates and bring down corporate tax. “There would be more stimulus in store for exports. The government will focus more on small towns and infrastructure,” he told Business Standard.

As NDA is not constrained by Left support, privatization and sale of public enterprise equity can also get a fillip, he added.

According to YK Alagh, chairman of Institute of Rural Management, Anand (IRMA), with the Congress-led UPA government doing a "fairly good job in raising demand in rural areas", agriculture and agro-based sectors will get a fillip. "Also, since last few years, it has been into consumption expenditure. Therefore, I believe light consumer goods industry will also benefit," he added.

Talking about industries benefiting in case a BJP-led government comes into power, Alagh said, "Previously NDA, of course, has proved to be investment oriented government. The BJP-led government has laid more emphasis on small towns and small trades as well as traders. Hence, the trading community will get a boost if BJP comes to power.”

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He added that both the Congress and BJP have by and large left big industries alone. “They may have favourite industrialists but not any particular industry," said Alagh, a well-known economist and former union minister.

For Tejal Desai, faculty member at the Indian Institute of Management, Ahmedabad (IIM-A) a BJP-led government could prove beneficial for industries across. "Historically, BJP has been an entrepreneurial party while Congress tends to be leaning on the social side. Except for the Hindutva tag that has been a matter of shame for BJP, Gujarat has been an example of how the party favours capitalism unlike Congress which is quite bureaucratic," says Desai.

Many experts feel that banking, insurance and healthcare will not be impacted whoever forms the government. “GDP at any cost will not be more than six this year. However, we will be better off compared to US, Japan and Europe whose GDP will be -1 to + 2 range,” said Ahmedabad based management expert Sailesh Thakker.

With interest rates on loan in India higher than western countries like Europe, more money will continue to pour in steel, power and finance sector, he added.

Each decision by the new formed government would have a local consequence. The allied forces may not allow Congress or BJP to take decisions that has a huge impact on the society, according to Thakker.

“So if there is a re-election after 12-14 months, which seems very much likely to me as of now, Congress or BJP cannot win uprightly,” he said.

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First Published: May 15 2009 | 12:54 AM IST

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