March 27 (Bloomberg) -- The leaders of India’s ruling Congress party promised poorer voters rights to health care and housing, while insisting it could win elections starting next month even as polls show its 10-year rule coming to an end.
The party pledged to restore growth in Asia’s third-biggest economy to more than 8 percent within three years, while expanding welfare programs to elevate two-thirds of the nation into the middle class, according to its manifesto for the election starting April 7. It included no details on how it would pay for the policies.
“There will be a discipline forced by the markets to rein in the promises,” said Prasanna Ananthasubramanian, a Mumbai-based economist at ICICI Securities Primary Dealership. “This is like putting the cart before the horse. What’s needed is to prioritize growth, widen the tax base and then expand the rights-based schemes.”
Congress is pushing to stave off a challenge from Narendra Modi, whose opposition Bharatiya Janata Party is leading in opinion polls, while falling short of a majority. Prime Minister Manmohan Singh’s administration has seen its popularity dip as it oversaw the slowest growth in a decade and Asia’s highest inflation while expanding subsidies for the poor.
India’s subsidy bill rose fivefold in the past decade under Congress rule to 2.6 trillion rupees ($43 billion) a year. In the same period, the Indian economy has only doubled in size, according to the International Monetary Fund.
Singh’s Congress party is headed for its worst-ever performance with 106 seats, according to an opinion poll released this month by NDTV Television channel and Hansa Research. The BJP is poised to win 195 of 543 seats up for grabs in the lower house of parliament in the elections after votes are counted May 16, the poll indicated.
“Opinion polls, I don’t have much faith in them because they have been proved wrong again and again,” Congress party President Sonia Gandhi told reporters in New Delhi yesterday, noting how surveys failed to predict the past two elections. “Our people are ready to fight, many have already started the fight, and we will win.”
The party called for the central bank to balance price stability and growth, repeating comments by Finance Minister Palaniappan Chidambaram published earlier this week. A Reserve Bank of India panel in January recommended making inflation the “predominant objective” of monetary policy for the first time.
Congress also pledged to enact a goods and services tax law within a year and make sure everyone has a bank account within five years. It also said it’d avoid any risk of retroactive taxes, a move that comes after a $2.2 billion claim on Vodafone Group Plc damaged the country’s image among foreign investors.
“There is nothing earth-shattering in this manifesto,” said Sujan Hajra, a Mumbai-based economist at Anand Rathi Financial Services Ltd. “Manifestos are mostly symbolic in nature and there isn’t much departure from what they had promised earlier.”
Singh, who won’t seek a third term, said rising prices were largely due to global factors. India’s consumer-price inflation of 8.1 percent is the fastest among 18 Asia-Pacific economies tracked by Bloomberg.
“We took a deliberate decision to reward our farmers with remunerative prices, and that had the consequence that the consumers, of course, were required to pay a higher price,” Singh said yesterday at the briefing with Sonia Gandhi and her son Rahul Gandhi, who is leading the party’s campaign. “But we have made every effort to make sure the effect of rising prices does not hurt the poor.”
India’s economy will expand 4.9 percent in the fiscal year ending March 31, faster than the decade-low expansion of 4.5 percent last year, according to Statistics Ministry forecasts.
Congress, which is campaigning on the party’s record of spending on programs ranging from cheap food to guaranteed work in rural areas, promised to expand programs offering toilets, electricity and skills training, according to the manifesto. About 70 percent of India’s 1.2 billion people live in rural areas, according to the 2011 census.
Singh’s government has already passed legal mandates for people to get subsidized food, free education and greater access to government records. Its move to forgive farmer loans helped it retain power in the 2009 election.
Support for Modi, the chief minister of Gujarat state in western India, has swelled as Singh’s government struggles to overcome corruption scandals and consumer-price inflation that averaged about 9 percent for the past two years.
“It’s a document of deceit,” Ravi Shankar Prasad, a BJP spokesman, said yesterday, referring to the Congress manifesto. “When they have not done anything in the last 10 years, they are dreaming to fulfil those promises in five years.”
Modi’s campaign has pointed to his 13-year role in Gujarat, a state whose economy outpaced the national growth rate in the last six fiscal years.
“Congress have failed to address the central point of Modi’s appeal which is that the economy has collapsed and he is promising to put it back on track again,” said Prem Shankar Jha, an author and independent political analyst in New Delhi. “This is mainly just a recycling of previous promises and commitments. It doesn’t inspire much confidence.”