BJP provides first glimpse of its economic vision

Promoting manufacturing, simplifying tax structure and higher MSP for farmers on the agenda

BJP President Rajnath Singh today said that if the party-led NDA government comes to power, their foremost priority will be to promote the manufacturing sector. 

 

Speaking at BJP’s national council meeting, Singh said they would aim to increase the share of manufacturing in India’s GDP to 20%. He said the current account deficit (CAD) was burgeoning because the manufacturing sector was being ignored. At present, the share of manufacturing in the GDP has been 15-16%.

 

“The CAD has increased because our imports have increased, while our exports have decreased. This has happened because the manufacturing sector has not been promoted... To settle the CAD, we will increase the share of manufacturing in GDP to 20%,” Singh said.

 

The BJP president said they would also make the taxation system of the country less complicated. He, however, did not mention the proposal do away with all the major taxes in exchange for a bank transaction taxation, which his party was considering. Party leaders said it had decided to drop the maverick proposal. But, the BJP president said his government will ‘provide substantial relief to income-tax paying middle class’.

 

Singh, who was an agricultural minister during the Atal Bihari Vajpayee’s government, said they would implement a ‘farm-income insurance scheme’. According to this, each farmer will be guaranteed a minimum income which will be calculated based on the size of his farm.

 

Though Singh talked of mismanagement in the economy’s fiscal parameters, based on his speech it appeared unlikely that subsidies to the farm sector will be cut by BJP if it comes to power. On the contrary, Singh suggested that the farmers were being underpaid and exploited, and they would increase the minimum support price for their crops.

 

“We will give farmers the right price for their produce... We will ensure that the loan which a farmer takes does not become a burden. Hence, the rate of interest at which loans are given to farmers will be reduced,” Singh said.

 

There was no mention of the party’s stance on foreign direct investment (FDI). The BJP has opposed FDI in insurance and retail sector. Instead, Singh announced that ‘Kisan bazaars’ will be set up where farmers can directly go and sell their produce, bypassing the middlemen.

 

“The UPA government is opening many sectors for FDI without much deliberation or consultation. Recently, the Centre opened even the Railways to FDI, which is a 100% government enterprise. Before taking such key economic policy decisions Parliament and the opposition should have been taken into confidence but the central government is taking unilateral decisions. This tendency of taking hurried decisions without consulting the major stakeholders is impacting the process of disinvestment as well because it increases uncertainty,” Singh said.

 

The BJP president criticised Prime Minister Manmohan Singh’s government for pursuing Pakistan to get a Most Favoured Nation status. Singh said his government will ensure that this strategy is dropped. However, he advocated improving cross-border trade with Myanmmar.