India’s Congress Party to Supply Cheap Cereal, Help Farmers

March 24
India’s ruling Congress party said it will supply cheap rice and wheat to the poor and relax interest payments for farmers, reaching out to the country’s 700 million rural population before next month’s election.

“The Indian National Congress is determined to ensure that farming becomes a profitable occupation,” the party said in its manifesto, which was released in New Delhi today. “All measures in support of this objective will be taken.”

Under Prime Minister Manmohan Singh, government spending on subsidies, a farm debt-waiver program and other welfare plans has seen the deficit ballooning to 6 percent of gross domestic product this financial year compared with a 2.5 percent target.

“It’s very difficult to imagine how they will implement this; it’s nothing but an election plank,” said Shashank Khade, who helps manage $300 million at Kotak Securities Ltd. in Mumbai. “If it happens, it will widen the deficit, but the next finance minister will tighten the belt by bringing unplanned expenditure under control.”

Winning rural voters is key to gaining enough seats in parliament, with about 58 percent of India’s 1.2 billion people living in villages and dependent directly or indirectly on farming. Out of India’s total population, 714 million people are eligible to vote, according to the Election Commission, which conducts polls in the country.

While 36.8 million farming families benefited from last year’s agricultural debt-waiver program, the Congress party said in the manifesto it would “extend interest relief to all farmers who repay bank loans on schedule.”

Rice, Wheat

The party said it will offer 25 kilograms (55 pounds) of rice or wheat at 3 rupees (6 U.S. cents) a kilogram to each poor family each month if returned to power. Rice costs 22 rupees a kilogram in New Delhi and wheat costs 13 rupees a kilogram, according to the food ministry.

The party also pledged to set up subsidized community kitchens in cities for the homeless and migrants.

General elections in the world’s largest democracy will be held from April 16 to May 13, with votes being counted on May 16.

Singh said at the manifesto release function that the policies of his government had boosted the rural economy and that demand from these areas will lead to a revival of economic activity in the country in the next six to seven months.

The party pledged to stick to the schedule of introducing a goods and services tax starting April 1, 2010. It also pledged the addition of 12,000 to 15,000 megawatts of power every year.

Seeking Re-Election

The Congress party, trying to win a second consecutive term, is seeking to counter the economic slowdown to a 7.1 percent pace in the current financial year. India’s elections are being held when global recession has curbed exports, cutting growth to its slowest pace since 2003.

The 124-year-old Congress party, led by Sonia Gandhi, also promised to maintain high growth with fiscal prudence and low inflation.

The party said it was committed to fiscal responsibility to ensure the government can invest in welfare programs.

“This will require that all subsidies reach only the truly needy and poor sections of our society,” it said. “The Indian National Congress will continue its efforts to create and implement a national consensus on this issue.”

The Congress party, which had pledged in the 2004 elections to revive growth to 8 percent and work toward achieving a 10 percent pace, is counting on having maintained an average economic growth rate of about 8.5 percent during its term.

Majority Stakes

The government plans to retain majority stakes in banks, insurance, telecommunications and energy companies, the manifesto said.

The Congress party rejected what it called the “blind privatization” of government assets espoused by the opposition Bharatiya Janata Party. The party said Indian citizens should have the right to own stakes in such companies, while the government retains a majority.

The party pledged a “relentless” fight against terrorism. The November terrorist attacks that killed 164 people in Mumbai have stalled peace talks with Pakistan, it said.

“It is now entirely up to Pakistan to break the impasse by taking credible action against those responsible for the carnage in Mumbai,” the party said. “If it does so and dismantles the terrorist networks that operate from its soil, a Congress-led government will not be found wanting in its response.”

The party is also banking on improved infrastructure in some rural and urban areas, rural job guarantee programs to improve incomes and reduce poverty and an increase in the salaries of government employees during the government’s five- year term for voter support.

The Congress party-led United Progressive Alliance, or UPA, is competing for votes with the main opposition Bharatiya Janata Party-led National Democratic Alliance, or NDA.

The two are locked in a triangular contest with a grouping of communist and regional parties. Elections to the 543 parliamentary constituencies will be held in five phases.