Public Policy

BJP Manifesto 2024 Lacks Major Structural Reforms BJP Manifesto 2024 Lacks Major Structural Reforms Chandrasekaran Balakrishnan May 17, 2024 Public Policy The major political parties’ election manifesto provides their approach, thinking, and understanding of the current issues and challenges faced by the economy, society, and geopolitical nexus with national and international scenarios. However, what is apparently missing from both the Congress and BJP election manifestos are the intentions to address the long overdue structural reforms, which are embedded with institutional reforms and have huge potential for positive impacts on the economy, society, and welfare of the people. Most election manifestos’ promises are designed as deceptive ploys for perception changes among voters in general and targeted segments in particular. Bharatiya Janata Party’s 76-page manifesto for the 2024 general elections broadly outlines its intention for the continuity and expansion of its several welfare initiatives of the last decade. The party’s manifesto focuses on key segments like rural areas, youth, farmers, women, and the middle class. The party counters last decade’s performance with that of the decade before 2014, wherein the country faced corruption, policy paralysis, and governance failures by the government of those times. In these fierce debates, there is not much the Congress party can defend itself with since its weaknesses are at multiple levels, from organisational to leadership at national and regional levels. Unlike the Congress Party manifesto, the BJP has largely avoided any upfront freebie announcements in their manifesto. Nevertheless, there is a huge contrast in terms of aspirations of the segments vs the facilities and services available at present for these segments. However, evaluating each of the initiatives of the BJP is inevitable because ascertaining the long-term impacts created has to be done independently. The party might have touched every other aspect of  society and the economy, but the institutionalisation of some of the aspects, like decentralisation and empowering the local bodies, especially the urban local bodies, the party, or the government, has not done much yet. Inadequate institutional reforms lead to a lack of accountability, causing delays and resource wastage year after year for quite a long time. Given the mixed performance in urban and city development initiatives over the last decade, the BJP’s promises to shift the urban landscape towards providing world-class infrastructure and promoting sustainable living are ambitious undertakings. Accomplishing these goals within five years is no small feat and would require significant efforts from the government machinery, particularly in addressing the existing challenges within the local urban governance structure. These challenges include bureaucratic hurdles, rent-seeking practices, inadequate efforts to engage urban communities, a lack of independent evaluations, and the underutilization of technological tools in service delivery. It appears that the BJP’s election manifesto was crafted by individuals or a team with ambitious goals, possibly overlooking the complexities and obstacles inherent in achieving such sweeping changes within the specified timeframe. Despite these challenges, the BJP has promised the following sweeping announcements made in the manifesto, which are impossible to achieve in a matter of few years without decentralisation and institutional reforms for cities’ overall governance systems: 1. Creation of new satellite townships near metro cities across India through a combination of reforms and policy initiatives. 2. Create unified metropolitan transport systems that integrate multi-modal transport facilities and reduce commute time in cities. 3. Create water-secure cities, leveraging best practices for wastewater treatment, aquifer recharge, and smart metering for bulk consumers. 4. Long-term infrastructure projects with centre-state-city partnerships with a vision to revitalise our urban landscapes and enhance the quality of life for our citizens. 5. Develop more green spaces like parks, playgrounds, etc., reviving water bodies and developing natural spaces to make cities more adaptable, sustainable, and people-friendly. 6. Continue eliminating open landfills to manage all kinds of waste being produced in Bharat through ‘The Waste to Wealth Mission’. 7. Undertake the creation of the Digital Urban Land Records System.   8. Work with state governments and cities to encourage them to create a modern set of legislation, by-laws, and urban planning processes using technology.” The central government has to initiate a vibrant public policy dialogue with state governments and local governments for effective implementation of each of the above aspects of bringing about transformational changes in the urban landscape. Moreover, without institutional and decentralised reforms to empower the urban local bodies to deliver social, physical and digital infrastructure, the BJP’s following promises would end up in a nightmare in years to come: “We have initiated metro in 20+ cities over the past decade; we will expand the metro network in major urban centres, ensuring last mile connectivity…We will construct ring roads around major cities to improve mobility and decongest cities…effective use of PM Gatishakti National Master Plan. We will undertake the creation of the Digital Urban Land Records System. We will work with state governments and cities to encourage them to create a modern set of legislation, by-laws and urban planning processes using technology.” However, the BJP party manifesto assures that “we will undertake more institutional reforms and simplify processes using technology to ensure that citizen-government interaction is significantly improved,”  but it is not all that easy to do urban governance reforms without learning from the past. Any government, whether central, state or local, has to first recognise the facts of what went wrong for all these years in terms of the inadequate delivery of services and facilities that the people have demanded and the rise of aspirations. also, it is strange that even after a quarter century, the major political parties are not openly advocating implementing the 73rd and 74th Constitutional Amendments in true letter and spirit on not just the funds and functions but reasonable administrative and execution autonomy. The BJP’s promises should have been more substantive on concrete steps for decentralisation and institutional reforms rather than the currently proposed several bunch of guarantees with overambitious minimum governance guarantees at the local body level. The party has promised to “take further steps to facilitate the fiscal autonomy and sustainability of Panchayati Raj Institutions.” While these institutions are already distanced from

Same old slogans and appeasement politics in congress manifesto Same old Slogans and Appeasement Politics in Congress Manifesto Chandrasekaran Balakrishnan April 30, 2024 Public Policy The Indian National Congress Party recently released its 48-page manifesto, titled “Nyay Patra,” for the general elections of 2024. As we examine the manifesto, it’s apparent that the party has adhered to traditional formats reminiscent of past manifestos. The Nyay Patra is a mix of old rhetoric and questionable policy directions that raise serious concerns.The manifesto’s overarching theme seems rooted in the party’s traditional approach to governance, prioritising welfare schemes over robust economic growth strategies and development-driven governance. While the intention to uplift the socio-economically disadvantaged is noble, the reliance on handouts and appeasement politics may not address the root causes of poverty and inequality. There is room for a broader perspective that encompasses not just wealth distribution but also strategies for wealth creation and equitable growth.Instead of focusing on institutional reforms to strengthen the nation’s governance framework, the manifesto appears to propagate a divide-and-rule mentality, emphasising identity-based politics rather than inclusive nation-building. This is evident in the party’s insistence on long-standing minority appeasement policies, which risk perpetuating social divisions rather than fostering genuine integration. (Refer to pages of 4, 6, 7, and 11 of the Congress Manifesto-2024 on Equity, Religious, and Linguistic Minorities).Furthermore, the manifesto’s lack of emphasis on economic reforms and job creation reflects a worrying disconnect from the realities of the global economy. The proposal to create three million government jobs without addressing the need for a conducive environment for private sector growth is shortsighted and could exacerbate fiscal pressures. The manifesto’s failure to address the dynamics of Indian labour markets, particularly in sectors like rural-based agriculture, allied activities, and urban development, is a glaring oversight. Southern and Western states, which are relatively more developed, already face a significant shortage of semi-skilled and skilled manpower across sectors. Moreover, historical evidence highlights the adverse effects of artificial wage increases under schemes like MGNREGA, contributing to inflationary pressures. Despite these well-documented challenges, the Congress Party’s manifesto fails to learn from past failures, reflecting a lack of foresight and concrete developmental focuses.Additionally, the manifesto overlooks emerging challenges such as technological disruption and the need for digital infrastructure development. Amidst a dynamic technological revolution reshaping social and economic landscapes, the Congress Party’s manifesto appears disconnected from emerging realities. The traditional social stigma of caste dominance, which is gradually fading, remains unaddressed on the party’s agenda. The market process has the potential to mitigate caste-based disparities by ensuring equitable access to essential services and opportunities, yet the manifesto fails to recognise this transformative potential.Furthermore, the party’s oversight of emerging growth centres and the pressing need for world-class social and economic infrastructure underscore a lack of vision for rural-urban transformations. However, this aspect seems overlooked in the party’s agenda While some initiatives outlined in the manifesto, such as enhancing institutional credit to SC and ST for home-building, starting businesses, and purchasing assets, providing sports scholarships of Rs 10,000 per month for talented and budding sportspersons, and introducing reforms in industrial and labour laws, deserve recognition, they are overshadowed by the overall lack of vision and strategic direction.Moreover, it is crucial for the manifesto to outline concrete strategies for key areas such as constitutional reforms, judiciary strengthening, anti-corruption measures, and environmental protection. Emphasising national security, including measures to counter terrorism, should also be a priority. Lip service paid to these concerns without concrete action plans undermines the credibility of the document and the party’s commitment to effective governance.It’s worth noting that the Congress Party’s manifesto reflects an activist approach rather than embodying the maturity expected of a longstanding political party’s document. While the manifesto outlines several initiatives, some of its proposals, which are listed below, raise concerns: 2024 Congress Manifesto Promises Consequences Caste Census     In 21st-century India, the caste census is not the first principle for empowering the different communities. Unlike in the past, today we have many better ways of empowering the underprivileged communities in India through more decentralization, community participation, and blended technological use in the delivery of services and facilities. We must learn from history how we must not use poor people with caste tags as the only tool to woo them for anything but for vote sake. To raise the 50% cap on reservations for SC, ST and OBC   The rise of reservation caps cannot be the only solution but better quality of education and facilitating productive employment opportunities are actual empowerment for communities. Reservation of 10% in jobs and educational institutions for Economically Weaker Sections (EWS) will be implemented for all castes and communities without discrimination    This is a very vague promise. Stating “all castes and communities without discrimination” does not make any sense. Without improvements in the quality of education affirmative action measures will not achieve the desired goals even after a few decades.   Reservation in private educational institutions for SC, ST, and OBC   This is a very dangerous promise that will destroy the freedom of enterprises and economic freedom that we have unleashed after the 1991 reforms. Whatever the quality of education is found in the private educational institutions will be faced with grave situations for undermining the quality. Public Procurement Policy will be expanded to award more public works contracts to contractors belonging to the SC and ST communities.    This has not helped the targeted communities for decades. From these same communities, there are enterprises that are supplying goods and services to world-class projects with high quality and innovations in the products. Economic empowerment of minorities is a necessary step for India to realise its full potential  Without improving the quality of education to the communities including minorities, the promise of economic empowerment will not be feasible. The Rajasthan Model of cashless insurance up to Rs. 25 lakhs will be adopted for universal healthcare.    This promise for entire country coverage would not be feasible given the fiscal constraints faced already. However, the promise can be targeted at the needy people like the elderly population

Kerala Budget 2023 Kerala Budget 2023 Chandrasekaran Balakrishnan March 20, 2023 Public Policy   The Kerala Budget for the year 2023-24 aims to “improve the standard of living of the people and create a sustainable and modern ‘Nava Kerala’ (New Kerala).” The state says that in the past year, more than one lakh new enterprises have been launched in Kerala. The state is also striving to achieve a higher economic growth rate in the current financial year. Since the state has a large segment of elderly population, with aged 60 years and above comprising16.50% in 2021 and it is projected to increase to 20% by 2031. With this large aged population, ensuring social safety would be an enormous challenge given the constraints of state finance. It is predicted that very soon Kerala may become the highest dependency-population ratio state in the country. Most youth in Kerala either migrate to other states or immigrate to other countries either for education or for employment as the prospects for fulfilling their aspirations are limited within the state. Kerala’s economy grew by 12.01% GSDP in 2021-2022. For the first time in recent history, the state agriculture-allied sector and industry-allied sector have achieved a growth rate of 6.7% and 17.3% respectively. Within the industrial sector, an impressive growth rate of 18.9% has been achieved in the manufacturing sector due to the low level of the base in the previous year. Though there is a marginal increase in its own tax revenue but the exorbitant increase in the Kerala government’s committed expenditures like employee salary and pension liabilities pose serious threats to the state budget, leaving not much for the welfare of the state for long-term assets creation through capital expenditure. Capital expenditure allocation for 2023-24 is proposed to be INR 14,606 crore, a decrease of 2% over the revised estimate of 2022-23.  In 2020-21, INR 46,754 crore was incurred as expenditure for salary and pension benefits. It has further increased to INR 71,393 crore in 2021-22, which is an increase of INR 24,639 crores and an increase of 53%. As per actual expenditure, 81% of revenue receipts was spent towards committed expenditure in 2021-22, leaving only 19% of funds for development projects/schemes. Further, Kerala’s committed expenditure is expected to increase by 5% over the revised estimate of 2022-23. In 2023-24, Kerala is estimated to spend INR 94,649 crore on committed expenditure, which is 70% of its estimated revenue receipts. This comprises spending on salaries (30% of revenue receipts), pension (21%), and interest payments (19%). According to RBI Report (2022), Kerala state is one of the highest debt burdens based on the debt-GSDP ratio in 2020-21. It is one of the top 10 states with fiscal vulnerability in the country. The growing revenue deficit would be worrisome for the state economy. Kerala’s revenue deficit is estimated to be 2.1% of GSDP (INR 23,942 crore) in 2023-24, marginally higher than the revised estimates of 2% of GSDP for 2022-23. Though, the revenue deficit is expected to be lower than the budget estimate with 2.3% of GSDP in 2022-23. The fiscal deficit for 2023-24 is targeted at 3.5% of GSDP (INR 39,662 crore), which is the highest limit prescribed by the Union Government for states. In 2022-23, as per the revised estimates, the fiscal deficit is expected to be 3.6% of GSDP, marginally lower than the budget estimate of 3.9% of GSDP.  Kerala Budget 2023-24 announced to increase in revenue augmentation in stamp duties, electricity duty, and taxes on vehicles will all be increased. Property tax and royalty on minor minerals will also be revised for revenue augmentation to bridge the shortfall of revenues. A Social Security Cess of INR 2 per litre will be charged on liquor, petrol, and diesel to generate revenue of INR 1,150 crore and will be used for the Social Security Seed Fund.The Kerala budget has also announced a few interesting initiatives like Life Science Park and 3 Digital Sciences Parks, which will be a major boost to the state with an investment of INR1000 crores for the promotion of higher education. While one could see the State Budget largely blames the Union Government for various aspects like low state share of tax, etc., Kerala’s budget for 2023-24 has actually been inspired by the Government of India’s Make in India announcement of “Make in Kerala” through which the state aims “to increase domestic production, employment/entrepreneur/investment opportunities in Kerala”. The Budget also announced sponsoring 100 research students for short-term fellowship projects in international universities across the globe. To implement ‘Make in Kerala’, the state has done a scientific study to find ways to pursue it. A study by the Centre for Development Studies found that “Kerala imported products worth around INR1,28,000 crore in 2021-2022. Out of this, 92% was from other states. During this period, the state’s exports were around INR74,000 crore. Out of this, 70% was to other states. From this, it has to be understood that the trade deficit of Kerala is very high. In this context, the study aims to find out the imported products which can be produced locally.”   However, the state should take cautious steps and promote the production of goods within the state through ‘Make in Kerala’ only if the state has comparative advantages on essential resources over other states, both in terms of cost of production and its capability to scale up. Otherwise, it would not able to mark any difference even if the specific profitable products are promising in a short-term period. Institutional structure and means of financing large investments from the private sector are weak in the state. There is a poor nexus among factors of production across different sectors in the Kerala economy. Though, it is quite interesting that the state has mentioned in its budget that “there has been a huge boom in the infrastructure development sector in Kerala. Construction activities for a length of 1931 km worth around INR 1,33,000 crore including National Highway 66 and other National Highways are progressing at various stages.”  The urban population of Kerala is about 70% but the civic facilities and