In Political-Economy a “manifesto” is a declaration of major
issues the political-party will undertake after winning the elections. A good
manifesto increases the chances of the political-parties to win in elections,
which is the goal of political-economy. From the point of view of growth and
development, an election manifesto outlines the course by which these two
objectives can be attained; every issue leads to these… But, on a subtle level every
government tries to maximize employment or minimize unemployment and ensure
price-stability by curbing wasteful expenditure because fiscal profligacy can
lead to inflation. Every issue in the manifesto has a cost and a benefit in
terms of inflation, because government expenditure increases demand, and
employment, again, because of increase in demand. These two issues,
price-stability and full-employment, form the core of all other issues. Government
expenditure leads to increase in demand and employment as long as there is
unemployment in the economy, otherwise inflation will increase because
production can not be increased, again, because of full employment. The present
government at the center overlooked the importance of price-stability and
continued fiscal expenditure following recession in 2008 even after the economy
reached full-employment in 2012, the economy’s unemployment rate was recorded
3%. The desire to stoke growth-rate after full-employment resulted in high
inflation. And, all these happened when we have had an economist and an
academician as a Prime-Mnister. Every monetary economist knows that the
objective of the economy is price-stability with full-employment, but he
favored full-employment and over-employment over price-stability in the face of
supply-side problems… Increasing employment when we have supply-side constraints
is bound to increase inflation. Presenting a populist manifesto when inflation
is stubborn at high levels can backfire when people know that inflation is high
and finances are stringent therefore it is hard for the government to deliver
its promises. As far a fiscal position is concerned no further big expenditure
is desired and possible. Therefore to think that the upcoming government would
fulfill it promise is like rain without cloud, not probable. Nonetheless, if we
have democracy, then we will have elections and manifestos. Everybody knows
that how much it is difficult to pass even a good legislation in the
Parliament. Any political party voted to power will face big challenges as far
as country finances and politicians are concerned…
Inflation made the Congress lose election in many states
recently. It is an issue which is directly related to common people and their
income. High inflation means low real-income, low savings and investment, and
lower welfare. It directly affects the growth rate of the economy because high
inflation means higher interest rate and lower investment and low growth rate.
Congress in its manifesto has rarely spoken of inflation and wherever it is
mentioned it said to be a problem tackled by the RBI and at the other place
inflation is attributed to global factors which reflect the serious flaw in the
government understanding and argument… The Congress has no concrete plans to
control inflation and I think people will not provide more time for correction
in inflation when it lost all the crucial time when it was in power (now). I
think people will not believe the Congress as far as inflation is concerned by
looking at its inflation fighting credentials. As far as the BJP is concerned
its track-record on inflation is good. Inflation during the NDA rule was
averaged around 4-5 % which is also a testimony for non-inflationary policies.
Moreover, the BJP in its 2014 manifesto has vowed to bring inflation and
interest rate down. It has proposed to set up a price-stabilization-fund to
combat inflation which is a norm in the developed countries they use the price-stability-fund
to restrict too much volatility in the prices. BJP has said to reform the APMC
act to control food-inflation and to bring special courts to curb hoarding and
black-marketing. Therefore, as far as prices are concerned we can draw the
conclusion that BJP looks more credible by looking at history and by the ideas
like APMC reform and price-stabilization fund. Atleast it has a road map for reduction in inflation and
price-rise. People this time will vote for an anti-inflation, anti-price-rise
government, because inflation is among the most important issues for the
upcoming elections…
Another peculiar feature of the 2014 election has been all party
emphasis on employment and jobs. Some are talking about reservation in jobs in
the private sector to lure voters like SP and JD (U) while other are trying to
push job-creation by economic-growth, a natural way, while others are trying to
push employment through welfare-schemes, like Congress. The youth of the
country has the highest number in the population of INDIA which forms a big
constituency. Every party has schemes for youth to attract them as voters and
the most important policy for the youth which we help them gain productive
employment is skill-development. Both, the Congress and BJP has given
considerable importance to skill development in their manifestos and the BJP
even has provided an innovation over skill-development, “multi-skill-development”.
Skill-development has been an older and successful programme in Gujarat as
compared to the whole INDIA.
Gujarat has been successfully implementing
skill-development for years. Congress wants to promote manufacturing for jobs
while BJP has placed emphasis on labor intensive manufacturing which will
create more jobs in the sector. BJP’s focus on the type technology is right
because in a labor rich country like INDIA it is more important to apply
labor-intensive technology to give people employment. Manufacturing and
skill-development are complementary ideas; one is incomplete without the other.
The skills manufacturing use to produce goods and services are provided by
skill- development. The skill-development programmes should impart only those
skills that are instantly required and consumed by the market...
This year
decentralization found place in the BJP’s manifesto against the Congress, which
probably does not suit its ideology. In the terms of an economy,
decentralization means redistribution of the power of decision making from
Center to the lower levels of government in the hierarchy. Poor economic
condition, rise in government expenditure and free-market ideology contributed
to reinforce the idea of decentralization of government functions. It aims to
foster competitions between different services, seek help of the private sector
and privatize some services and functions. Government decentralization has two
parts, the political part and the administrative part. Political
decentralization means more power to citizens or their elected representatives.
There are many types administrative decentralization, delegation,
de-concentration, devolution and disinvestment, but, here, we are concerned
with devolution. In devolution the power of decision-making, finance and many
functions are handed over to local and state government. Fiscal
decentralization means shift of the power to raise revenue and expenditure from
center to the lower level of the government. Poor health is one of the impeding
factors which affect education and the quality of human-capital in many
developing countries; thereby any investment made to improve health of the
vulnerable segment of the country is likely to have a positive impact on human
capital, national income and per-capita income. Several studies have showed the
importance of decentralization of governance and is a subject of debate among
social scientists, historians, policy-makers and politicians...
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