Medium-term agenda

The broad national agenda of the BJP, containing an illustrative list of important and priority items for preparing the nation for future challenges, is set out below:

India must adopt policies that will enable a sustained 8 to 9 per cent annual rate of growth of GDP. This would mean an agricultural growth of at least 5 per cent a year and industrial growth of at least 12 per cent a year.

Without powering agriculture in a big way, Indian growth rate cannot be sustained at higher levels. A separate agenda for the non-corporate sector, which accounts for 40 per cent of the GDP, should also be pursued to achieve this target of sustained high growth. Recognizing the gross neglect of proper strategy in the past, our Government will focus on a judicious combination of infrastructure and agriculture to achieve a high trajectory of growth.

In the next five years, we must become a credible partner in Asia's development process and forge a relationship on equal terms with the major economic powers of the world-USA, EU and Japan.

In the next three years, the Government will strive to achieve strong macro-economic fundamentals; fiscal rectitude where, more than fiscal deficit, the revenue deficit is controlled; strong and viable balance of payments; monetary policy designed to resist unrealistic fall in rupee value; moderate inflation; and credit availability to industry.

Some priority items for the national agenda

1. The Government will formulate a system of voluntary compliance with all direct and indirect tax obligations with test-check assessments of select cases and expedite conviction of the defaulters.
2. The Government will ensure a day-to-day working relationship with Indian industry through a structured forum.
3. Even as the private sector will be encouraged to invest in infrastructure, the Government will also invest in infrastructure. The private sector has not been a major contributor in this area. Even in the developed world, the share of the private sector in such development does not exceed 30 to 40 per cent. For this purpose, the Government will:
   • Access the long-term debt market in Insurance and Pension Funds.
   • Set up national-level regulatory bodies for different areas of infrastructure.
   • Bring about more transparency, institute contracts which are easily enforceable and formulate laws that simplify the procedures.
   It will also:
   • Cut non-productive expenditure;
   • Disinvest in non-strategic PSUs;
   • Control and rationalize subsidies and trim all except those that benefit the weaker   sections;
   • Reduce the size of the Government; and,
   • Simplify tax laws and widen the tax net.
4. The Government will institute effective anti-dumping machinery to prevent dumping from abroad and to prevent unfair anti-dumping action against the country.
5. The Government will ensure that a climate of competition is created in the insurance sector -- if need be, by involving Indian private sector in the insurance business.
6. The Government will rationalize the banking sector by creating specialization in unit banking, retail banking and commercial banking. This will be done by consolidation and mergers to create global-size banks and promote efficiency and profitability to strengthen the Indian banking system.

Resource generation: fiscal policy and the promotion of savings

All the above tasks will need large-scale resource mobilization. This will not only call for the widening of the tax base but also supplementing it with non-tax revenues. The BJP Government shall innovate such resource augmentation through motivated savings. The fiscal policy will aim to prevent the generation of black money. Tax on services will be reviewed.

We will structure a fiscal policy that will help generate a higher level of savings. We will aim to increase the savings rate to 30 per cent in the next five years.

Eradication of poverty through generation of jobs

In the next ten years, over 10 crore people will be provided jobs, besides ameliorating the extensive underemployment and concealed unemployment. Our strategy will consist of the following:

1. A substantially higher growth rate of GDP of 8 to 9 per cent;
2. Emphasis on sectors which offer large potential for employment, including small-scale, artisan-based and rural industries etc.
3. Opting for projects and technologies, wherever choices exist, without reducing productivity, that offer larger employment;
4. Increasing productivity in the informal sector through the support of technology, credit and marketing;
5. Redesigning the special employment programmes--Integrated Rural Development Programme, Jawahar Rozgar Yojana, Nehru Rozgar Yojana, Scheme for self-employment of the Educated Youth, etc.--to increase their coverage and effectiveness;
6. Encouraging the employment of women;
7. Fully involving the private sector and non-governmental organizations;
8. Adopting the institutional approach of cooperatives, wherever possible;
9. Implementing the special employment programmes through panchayat institutions;
10. Vocational training.

Role of Foreign Direct Investment

The percentage of Foreign Direct Investment (FDI) to total investment in India during the years 1991 - 96 is less than 2 per cent and confirms that even in the post-reform period, national development has been almost entirely financed by local capital. However, in areas like infrastructure (particularly energy, roads and ports), promotion of exports and high-technology industries, FDI can usefully supplement national efforts. Policies will be framed consistent with national interest in respect of FDI. The BJP Government will ensure that FDI flows into such priority areas and not in areas where the domestic industry is functioning well. The BJP Government will frame policies to restrict FDI in non-priority areas. FDI will be encouraged to promote exports rather than target the domestic market. FDI is welcome in a non-predatory role in joint ventures rather than in 100 per cent subsidiaries. Generally, the role of foreign capital should be in harmony with and advance, the nation's economic objectives, as also in line with other Asian countries. Again, until the Indian economy reaches a level of global strength, takeovers of existing Indian companies by foreign companies will not be encouraged and suitable, transparent rules will be framed to give effect to this policy. Even developed nations like France, Germany and Switzerland have restrictions on the takeover of domestic companies.

National agenda for unincorporated sector

The following measures are needed for the unincorporated sector.

1. The financing cost for this sector is phenomenal and they borrow at usurious interest rates. There is no exclusive, national-level financing agency for trade activities or for construction activities. Indian private-sector banks need to be encouraged and developed in these areas and the Government policies should facilitate the same. A separate development bank for this sector will also be considered.
2. There is no social security net for this sector. Unless and until the social security net is developed for this sector (of course, from the contributions of this sector), economic reforms will be a castle built on American sands and the European air, but not on Indian soil.
3. In order to mobilize savings of this sectors for targeted poverty alleviation programmes, it would be desirable that full deduction is given for the traditional commitments of the sector, including family obligation and contribution of this sector for temples, mosque, gurudwaras, etc.
4. This sector is a target for all levels of the State machinery like politicians, policemen, tax officials and municipal authorities. A national-level awareness programme of this sector's contribution and a national-level law to guard them against State excesses should also be formulated.

This sector has the greatest potentiality to grow with a quantum jump if this agenda is implemented. Any attempt to increase employment and to eradicate unemployment must begin here. This sector at once provides self-employment and multiplies employment. This single sector has the greatest potentiality to attack unemployment, poverty and hunger.

Role of Non-Banking Finance Companies (NBFCs)

The policy on NBFCs has been ad-hoc and they have been dealt with, at times, in a reckless manner. The new RBI guidelines preventing NBFCs from accepting deposits without rating is absurd, as we have not even developed standards for rating under Indian conditions. The BJP will review the entire regulation on the NBFCs and bring about an orderly growth and not planned destruction of this important segment. This sector alone finances most of the transportation business and the non-corporate sector, which is the most important and the largest sector of the national economy.

Industrial Policy Reform

THE immediate task of the new Government will have to be to create conditions for industry to regain its lost momentum. The BJP recognizes the need for corrective action on a war footing and attach particular importance to the interdependence of industry and agriculture. We will improve inter-sectoral terms of trade and other linkages so that benefits accrue to both. The BJP also reiterates the importance of the small-scale and cottage industry sectors, in view of their contribution to employment, wider participation and new entrepreneurship.

In order to achieve to above the objective, the BJP will:

1. Further simplify industrial approvals and remove the plethora of restrictive controls that now exist. The Industrial Development and Regulation Act will be replaced by an Industrial Development Act. The role of the Government will change from the restrictive, as it has been so far, to one of extending support and encouragement;
2. Encourage research and development in enterprises as well as in specialized institutions;
3. Permit hazardous industries only in specified areas. Separate satellite industrial parks will be set up exclusively for such units;
4. Give all encouragement and support to the small-scale and cottage industry sectors; and,
5. Ensure a healthy capital market with the twin objectives of increasing capital investment in the corporate sector and of providing protection to the investing public.

1. The Government should have the sovereign and inalienable right to choose its economic system as well as its legal, social, cultural and political system in accordance with its historic traditions, national genius and the express will of its people. This would be the foremost objective of our party to restore the desired autonomy.
2. Agriculture, which concerns the bulk of our people and, in particular, WTO issues connected with subsidies, fertilizers and seeds so that the interests of the farmer and consumer of food are not sacrificed would be adequately examined. No legislations concerning agriculture and commitments under the Uruguay Round would be allowed to be implemented without full democratic discussion.
3. The small-scale sector, which is the backbone of our economy and employment, would not be exposed to unequal competition, both from large houses in the country and from the transnational corporations from abroad. The small-scale sector would be strengthened.
4. The agreement on services, particularly financial services, would be monitored in respect of the entry of powerful foreign interests in our country. The immigration laws abroad should also not confuse rights of the developed countries for effective opportunities for our people in those countries.
5. The patent system, in particular, would not be allowed to become an import monopoly and working of a patent and dissemination of technology would be ensured by an effective and strong "license of right" and "compulsory license" regime.
6. The BJP would strive to work out a strategy and consensus within the nation and with all nations similarly placed to lobby for legitimately justified modification of the perspective, programmes, rules and schedule of the WTO.