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Rediff.com  » Business » The Government of India's report card

The Government of India's report card

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Last updated on: February 02, 2006 23:24 IST

The United Progressive Alliance government headed by Prime Minister Manmohan Singh came to power in May 2004 with a plethora of promises.

It promised to protect the interests of the common man, reduce poverty, generate employment, prevent farmer suicides, end labour exploitation, boost the economy and accelerate the pace of reforms.

Has it delivered? You judge.

Promise 1: Take the economy to at least 7 per cent growth per year.

Reality: In the period between July and September 2003, India's gross domestic product growth rate was 8.4 per cent. It dipped after that. A few months after the UPA came to power, the GDP rate plunged to 6.9 per cent. Now, it stands at 7 per cent.

India Inc confident of 10% GDP growth

'Eight per cent (economic growth) is perhaps the ceiling for the current year, given the current level of investment as a proportion of gross domestic product,' Finance Minister P Chidambaram told the World Economic Forum in Davos, Switzerland, recently.

'But if we can ramp up the investment to GDP ratio to say 30 or 32 per cent, then 10 per cent (GDP growth) is possible,' he added.

Promise 2: To introduce a National Employment Guarantee Act to provide at least 100 days of employment -- to begin with, and on asset-creating public works programmes -- every year at minimum wages for at least one person in every rural, urban poor and lower middle-class household.

Reality: The National Rural Employment Guarantee Act was notified on September 7 last year. The Act guarantees 100 days of employment in a financial year to every rural household. The Act is being formally launched on Thursday.

Hundred and forty five districts have been selected for the first phase: 23 in Bihar, 22 in Uttar Pradesh, 20 in Jharkhand, 19 in Orissa, 18 in Madhya Pradesh, 13 in Andhra Pradesh, 12 in Maharashtra, 11 in Chhattisgarh, and seven in Assam. Within four years, the Act will cover the entire country.

 Column: Can rural job quota scheme succeed?

But does that mean every villager will soon be employed for at least 100 days a year?

"Not yet," says a rural development ministry official.

"The law is in place. We need to create a system to ensure that public works programmes are created to provide jobs to the needy," the official adds.

Also, Opposition parties argue that the millions of poor, educated, unemployed people living in the urban areas have been kept out of the purview of the Act.

Promise 3: To reduce trade deficit and increase exports.

Reality: On the contrary, imports are increasing and exports decreasing.

In the first five months of the current financial year -- April to August last year -- the trade deficit reached the figure of Rs 783 billion. The imports went up to Rs 2,389.5 billion, as opposed to Rs 1746 billion during the corresponding months in the last fiscal year.

Promise 4: To repeal the Prevention of Terrorism Act.

Reality: The UPA government abolished POTA in September 2004. It was the Manmohan Singh government's first major policy decision.

The government argues existing laws are sufficient to check terrorism. Cracking down on terrorists' funding tops the government's agenda.

Promise 5: To pursue an independent foreign policy to promote multi-polarity in world relations and oppose all attempts at unilateralism. Particular attention will be paid to regional water resources, power and ecological conservation projects. Dialogue with Pakistan will be pursued systematically and on a sustained basis.

Reality: Has embarked on the 'soft border' initiative with Pakistan. Has accelerated the pace of developing friendship with China. Has accorded priority to building closer ties with its neighbours in South Asia and to strengthening the South Asian Association for Regional Cooperation.

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Last and far from the least, it has further cemented the foundation for better relations with the United States with the nuclear agreement. The deal, however, is on a sticky wicket now. 

Promise 6: To introduce a model comprehensive law to deal with communal violence.

Reality: Has gone ahead with the proposed legislation -- Communal Violence (Suppression) Bill, 2005 -- to check communal violence.

The Bill is currently under the consideration of the Prime Minister's Office and the National Advisory Council chaired by Congress president Sonia Gandhi.

Opposition leaders say it is a draconian and potentially dangerous piece of legislation as it gives extraordinary powers to the Central and state governments to deal with communal disturbances.

Promise 7: To accelerate the pace of economic reforms.

Reality: Under pressure from its Communist allies, the Manmohan Singh regime has virtually gone slow on the plans to sell stakes in public sector units to strategic investors.

Analysts say this is one of the major dangers that can derail the government's promise of economic reforms. Bowing to pressure from the Left, the government has abandoned plans to sell stake in 13 firms, including HPCL, Engineers India Ltd., Shipping Corporation of India and Rashtriya Chemicals and Fertilisers.

Column: Why reforms are slow in India

The UPA government has gone ahead with the privatisation of airports plan, but met with stiff resistance from Leftist unions and airport employees, who are now on strike.

And with the Leftists opposing a host of reforms in foreign investment and the banking industry, the reforms progress has been rather slow.

Promise 8: Develop and expand physical infrastructure like roads, highways, ports, power, railways, water supply, sewage treatment and sanitation.

Reality: The government has not announced or undertaken any new major infrastructure project. It is continuing with the projects that the previous Atal Bihari Vajpayee government had envisioned, like the ambitious river linking project and the Golden Quadrilateral.

The government says it is planning to expand the network of hospitals and educational institutions all over the country, undertake extensive irrigations projects and other developmental projects.

Promise 9: To ensure more public investment in agricultural research, rural infrastructure and irrigation. The rural cooperative credit system will be nursed back to health.

Reality: The rural cooperative credit system continues to bleed in most states. There has not been any dramatic increase in investment in rural infrastructure.

According to the Farmers Relief Forum, a Hyderabad-based farmers initiative, on an average 10 Indian farmers commit suicide everyday.

Why Andhra Pradesh is jihad's new hotspot

In Andhra Pradesh alone, nearly 2,500 farmers have committed suicide in the last 20 months.

Promise 10: To accelerate fiscal reforms and eliminate the revenue deficit of the government by 2009. To introduce the value-added tax, strengthen the Stock Exchange Board of India for the orderly functioning of capital markets and encourage foreign institutional investment.

Reality: The fiscal reforms are on, but the pace is doubtful. The government has introduced and implemented the value-added tax. The new fringe benefit tax has irked India Inc. SEBI seems to have been strengthened, and FIIs are continuing to pump in money into the capital markets in the country, taking the stock markets to historic highs.

George Iype
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