Congress targets “inclusive” growth in election pitch

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Reuters: India’s ruling Congress party, facing a likely general election defeat, defended its economic track record over a decade in power and sought to woo voters with offers of further costly welfare measures. The party, controlled by the Nehru-Gandhi dynasty and its scion Rahul Gandhi, is expected to lose due to public anger over graft scandals, high inflation and an economy growing at its slowest pace in a decade. "The ruling Congress party, controlled by the Nehru-Gandhi dynasty and its scion Rahul Gandhi, is expected to lose due to public anger over graft scandals, high inflation and an economy growing at its slowest pace in a decade" Unveiling its election manifesto on Wednesday, the party said it would lift 800 million people – almost as many as have the right to vote - into the middle class and raise gross domestic product (GDP) growth to 8% within three years. Appealing to its core constituency of poorer voters with a call for inclusive growth, Congress proposed new rights to include guaranteed access to health, pensions, housing and even “to entrepreneurship”. “Growth by itself is not sufficient,” Prime Minister Manmohan Singh told an event at which Congress president Sonia Gandhi made a rare public appearance in support of son Rahul’s leadership of the party’s flagging campaign. The 50-page policy document was long on policies to redistribute wealth with fewer proposals on how to generate it, reflecting a left-leaning heritage that predates independence in 1947. The nationalist opposition Bharatiya Janata Party (BJP), which opinion polls show winning the most seats in the election starting on 7 April, is expected to unveil a more pro-business manifesto next week, party sources said. Fiscal burden The Congress proposals risk further straining public finances, already under duress due to weak tax receipts and high public spending. Already, party programs like guaranteed paid work and subsidised grain for 67% of India’s population cost about 1% of GDP. The party contends that these have helped pull 138 million people – more than the combined population of Britain, Spain and Australia – out of poverty on its watch. The manifesto “suggests that the focus will be on getting the economy back on track”, Nomura economists Sonal Varma and Aman Mohunta said in a research note. “However, the entitlement-based policies will continue and will be widened to cover housing and health, which will entail a higher fiscal cost,” they said, adding that farm subsidies would be inflationary. Seeking to blunt BJP prime minister candidate Narendra Modi’s campaign, the ruling party promised to generate 100 million new jobs for youth in a decade. It floated a plan, similar to Modi’s, to create 100 new urban clusters. It also pledged to trim the federal fiscal deficit to 3% of GDP in the next three years from 4.6% projected for the current fiscal year. To achieve that goal, Congress would rationalise spending on subsidies, which currently amounts to 2.2% of GDP, and charge a user fee for access to uninterrupted power supplies and better train services. It has also promised to enact a general goods and services tax. The measure, stuck for years, would convert the country into a single fiscal union and add two percentage points to overall economic growth, economists estimate.

 Tamil Nadu could shape India’s next government

Reuters: The politics of forming India’s next government could come down to how many seats a 1960s matinee siren can wrest from a rival named Stalin in Tamil Nadu. At stake are 39 parliamentary seats in Tamil Nadu, a state known for its ancient Hindu temples, its modern auto industry – and a history of electoral landslides. With pollsters predicting that no party will win a majority in the 543-seat parliament, the caucus returned by India’s sixth-largest state could hold the key to forming a government after the five-week general election that starts on 7 April. Tamil Nadu Chief Minister Jayalalithaa Jayaram – or ‘Jaya’ to her fans – is riding a wave of popularity that could take her AIADMK party’s seat count to 27, according to one survey, potentially casting her in a new role as national powerbroker. Her party is one of many regional groups whose proliferation over the past two decades has made it impossible for national parties to rule alone in India. Two more are led by female firebrands, Mamata Banerjee in West Bengal and Mayawati in Uttar Pradesh. The portly, fair-skinned Jayalalithaa bears little resemblance to the singing, dancing heroine of 1960s Tamil cinema. But, at 68, she is probably more popular than she has ever been. Hopping around the state by helicopter, she is addressing enthusiastic crowds, including one last week near Tiruvannamalai, a holy site where Hindu pilgrims, in an act of devotion, walk around a mountain barefoot at full moon. “She is the only one who gives voice to the Tamils,” said tea seller M.K. Baskran, an AIADMK grassroots organiser, to noisy agreement from fellow supporters. Others thanked Jayalalithaa for food handouts that sustained their families. Pundits in Chennai, the former port of Madras founded by the British in the 17th century, describe Tamil Nadu as a ‘sweep’ state; not a swing state. That is the result of another British legacy: first-past-the-post voting. “A gap of 4-5 percentage points in the popular vote between the first and second party gives you a hugely disproportionate result,” N. Ram, publisher of The Hindu newspaper, told Reuters. Split like an amoeba Cinemas in Chennai are screening a digitally restored version of Jayalalithaa’s 1965 movie ‘One Man In A Thousand’, in which she plays a damsel in distress saved by leading man M.G. Ramachandran – or ‘MGR’ – in the role of a swashbuckling pirate. As well as bringing her extra publicity, the film revival holds the key to regional politics: It was actor-turned-politician Ramachandran who formed the AIADMK party four decades ago when he was kicked out of the DMK. “The DMK split was like an amoeba dividing or an earthworm being cut in two,” said Chennai journalist and commentator Gnani Sankaran. “These two formations are the major players – always. The others are minor players – always.” The DMK is still led by the 89-year-old M. Karunanidhi, who fired Ramachandran in 1972. But it is his son M.K. Stalin – named in honour of the late Soviet dictator – who is leading the party’s rearguard action. “There’s a wave against the Jayalalithaa government’s misrule, massive corruption and undemocratic governance,” Stalin told the Economic Times last week. Neither party commented to Reuters for this story. The DMK is, however, riven by in-fighting after quitting the Congress-led government in New Delhi a year ago. The party on Tuesday expelled Karunanidhi’s second son, a former cabinet minister, having banned him from the party slate for disloyalty. The DMK, the Congress and a minor ally won 27 seats in Tamil Nadu in the 2009 election. A decade ago, their alliance won all 39 seats, aiding the return to power of the Nehru-Gandhi dynasty that has dominated Indian politics since independence. Missing out Congress, isolated, now faces a wipeout in the state. In one sign of looming defeat, Finance Minister P. Chidambaram has bowed out of contesting his family bailiwick in Tamil Nadu, giving his son the chance to cut his political teeth. And, although the Bharatiya Janata Party (BJP) is poised to emerge as the largest parliamentary party – with 195 seats according to this month’s poll by the NDTV news channel – the Hindu nationalist opposition party has no base in Tamil Nadu. Even with its allies, the BJP could fall some 40 seats short of the 272 needed for a majority in the national parliament, according to the poll. That is where regional players like Jayalalithaa come into the equation. Her reluctance to criticise the BJP’s candidate for prime minister, Narendra Modi, and a past dalliance with his party, suggest she is positioning herself for power and influence in the next government. “Jayalalithaa is both in the BJP alliance and not in it,” said N. Sathiya Moorthy, director of the Chennai chapter of the Observer Research Foundation, a think tank. Her ability to dictate terms – or even stake a claim to the premiership – would depend on how big a “last mile” problem the BJP faces in cobbling together a majority. A weaker BJP result would strengthen Jayalalithaa’s hand, as she eyes the alternative of a coalition made up of regional parties, often referred to as a ‘Third Front’. “Within these different groups, anyone with 25-30 MPs is going to be contender for the prime minister’s position,” said commentator Sankaran. “And if Jayalalithaa has 30 MPs from Tamil Nadu, she will be able to demand the prime ministership.”