No more bear hugs, warns Congress

MANDATE 2004

The Congress attributed yesterday's stock market crash to manipulations by market operators and warned stern action against them.

"The new government will not hesitate to take action against those manipulating the market," senior Congress leader Manmohan Singh told reporters at his residence in the morning after the Sensex had shed close to 800 points.

Pranab Mukherjee, the Congress leader from West Bengal, said the crash had been engineered to destabilise the formation of the Congress-led government.

"This is clearly the job of manipulators," he told Business Standard at Singh's residence, where he had come to discuss the common minimum programme of the Congress and its allies.

When asked if the new government will give top priority to investigate yesterday's meltdown or bring out a white paper on the subject, Mukherjee said that there was no need for the government to initiate an enquiry as the Securities & Exchange Board of India (Sebi) had enough powers to get to the bottom of the affair.

However, both Mukherjee and Singh said yesterday's fall was an aberration and the market indices would get corrected shortly. "The correction will happen in a day or two," Mukherjee said. "Let's hope good sense prevails soon," Singh added.

In a statement aimed at stabilising the stock market, Singh said the United Progressive Alliance led by the Congress was committed to the healthy development of the markets.

"The policy of the alliance will be in favour of growth, industry, savings and employment. Very soon, the alliance will unveil its common minimum programme. There is no need to panic. We will bring a favourable climate for investors," he added. The common minimum programme is likely to be finalised in the next 2-3 days.

On the tough stand taken by the Left parties on privatisation of public sector units, Singh said that the Congress is not against divestment, though its agenda will not be driven by a policy. "We will be selective and go into it case-by-case when it is of national interest," he said.

Defending the role of the Communists in the alliance, Singh said: "The Left parties are as patriotic as anybody else in the country." Talking in a similar vein, Mukherjee added: "It is a canard being spread."

Singh also told reporters that he had spoken to the outgoing finance minister, Jaswant Singh, on the crash and shared his concern. He, however, did not disclose if he had given some concrete suggestions to Jaswant Singh.

Expressing his commitment to develop financial markets that reflected the strong fundamentals of the economy, Manmohan Singh said the UPA government would ask market regulators to investigate the matter after assuming office.

Asked if the market fluctuations were part of a ploy to create problems for the Congress to form a government, Singh said "our effort would be an orderly expansion and growth of financial market and all that is needed for it like tax policy and expenditure policy would be introduced. I would like to assure the people that whatever our policies, they will be in the interest of the nation."

Stressing that the common minimum programme would be finalised in a few days, the Singh said the economic agenda of his government would be "pro-growth, pro-savings, pro-investment and pro-employment."

"We have started the process on common minimum programme and the draft is being prepared. Our effort would be to place the programme in the next three or four days," he said.

The Congress-led alliance will unveil its common minimum programme "which will demonstrate the commitment of the alliance to fiscal discipline, realistic growth-oriented tax policies, control on unproductive and wasteful public expenditure and increased emphasis on agricultural growth, education, health, food security and social security in the context of a fast growing economy that is integrating with the world as well," he said.

"Our fiscal and other policies will seek to create a favourable climate for enterprise both Indian and foreign," Singh said, adding "there will be stability and transparency in all policies".

Stressing that the reform agenda could not be static, Singh promised that the new government would continue with all the reform measures of the NDA government, which were good for the economy.