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Congress promises to open up insurance, pension businesses for private firms

The Congress party has promised to permit private firms with Indian majority stake-holders in all insurance and pension businesses, if it comes to power. The insurance sector will be liberalised to boost the flow of long-term funds into infrastructure.

The party has projected political stability as its main offering if it wins the national election in September and October.

The main opposition party also committed itself to speeding up economic reforms.

India's most urgent need was a stable National government, said Sonia Gandhi, Congress president and Italian-born widow of assassinated former prime miniter Rajiv Gandhi.

Gandhi addressed media persons in New Delhi on the occasion of release of the party's election manifesto.

"Stability is the main issue. We have seen in the last two or three years coalition governments have failed, especially the last coalition government which has failed miserably," said Gandhi.

In the maniefesto, the Congress party said stability was related not to governments alone but to the stability of ideas, of policies and programmes.

"It is hoped that the people will give a mandate which will help the Congress to provide stability, for the people want it and know the Congress alone can give it," the manifesto said.

The party said it would accelerate economic reforms with a human face if returned to power.

It was the Congress government led by P V Narasimha Rao that launched India's economic reforms in 1991, starting to dismantle a decades-old socialist command economy in the face of a Balance of Payments crisis. The Congress manifesto said the economy had been the first and most immediate casualty of non-Congress rule.

The party said it would target annual economic growth of seven to eight per cent. It will aim to trim the combined fiscal deficit of the national and state governments to below four per cent of gross domestic product within three to four years' time, the manisfesto said.

India's gross or combined fiscal deficit, including the losses of public sector undertakings, was about eight per cent of GDP in the fiscal year ended March 1999.

The party said it would strive to phase out the revenue deficit over the next three to four years.

It urged a "strategic redefinition of the role and scope" of state-run enterprises.

The manifesto promised reforms in India's tax laws aimed at boosting revenues and widening the tax base.

The party promised to take immediate steps to revive capital markets and cut real interest rates to between three and five per cent. Real, or inflation-adjusted, interest rates now stand at more than 10 per cent.

The party promised to eliminate barriers to export growth. "India's exports must grow by at least 15 to 20 per cent per year on a sustained basis," the manifesto said.

Public investment in agriculture would be stepped up and the party would aim for a four to five per cent annual growth in the sector, the manifesto said.

"A sustained four to five per cent rate of growth is the essential pre-requisite for the time-bound eradication of rural poverty," the party said.

India has set an ambitious target of 4.5 per cent a year for agricultural growth in the Ninth Plan (1997-2002). Agriculture accounts for around 25 per cent of gross domestic product and sustains 71.4 per cent of India's almost one billion people.

The agriculture sector grew 7.6 per cent year-on-year in 1998/99 (April-March), compared with a drop of one per cent the previous year. It has set a target of three per cent year-on-year growth in 1999/2000.

The party said it would try to step up investments in the sector to cover irrigation, electrification, storage, marketing and research.

"Controls on the free movement of agricultural commodities and the processing of agricultural products will be reviewed with a view to benefitting the farmer," said the manifesto for the polls in which the Congress would clash with the Bharatiya Janata Party-led National Democratic Alliance.

It said measures would be taken to boost profitability in agriculture and to ensure fair and remunerative prices for their produce.

India achieved a record grains production of 203 million tonnes in 1998/99 (July-June).

The manifesto also promised fresh investments in the agro-processing industry and related sectors like sericulture, horticulture, aquaculture and silkworm breeding.

The party said it would boost small industries. To ease credit flows to the sector, both Indian and foreign venture capital funds would be encouraged.

UNI

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