President of Indian opposition Bharatiya Janata Party (BJP) Nitin Gadkari believes that his party would bring the economy of India back on track by dislodging the present ruling coalition in 2014 elections
Established in 1980, the Bharatiya Janata Party (BJP) is India’s second largest political party in terms of representation in the parliament. Occupying the right of centre in the Indian political spectrum, it is a firm believer of free market economics and capitalism.
But defeats in successive elections in 2004 and 2009 seem to have sown seeds of doubt in its economic thinking and posture. And it hurts to be seen as a market friendly party in a nation that has the largest share of the world’s poor.
The party, which has always been a faithful ally of corporations and businesses in India, talks more about pro-poor growth and an economy based on social inclusion.
The most recent and visible example of its about-face was its vehement opposition to foreign investment in the multi billion dollar retail sector in December 2011, though BJP had itself favoured the liberalisation when it was in power in the early 2000s.
Asia360 News speaks to Nitin Gadkari, President of the BJP about the Indian economy and his party’s economic plans for the country.
Asia360 News: You have said recently that BJP would dislodge the ruling government “to bring the country back on the path of economic growth.” What do you think is wrong with the economic policies of the current government?
Nitin Gadkari: I had written a comprehensive letter to the Honourable Prime Minister (Manmohan Singh) in January about the state of India’s economy. Let me share with you some of the thoughts that I shared with him.
The Indian economy is in complete mess today. There is virtual stagflation. Inflation has been hovering around 10% for the past two years, with food inflation above 12% during past two weeks. There seems to be no respite at all. The worst affected have been the poor.
On the growth front, there is a continued deceleration in output growth, while industrial production grew at a pitiful rate of 3.8% in July, the lowest in 21 months.
The figures are even more disappointing on the investment front. New investments in the country fell from 7.2 lakh crore rupees (US$145.5 billion) in April-June 2010 to 2.6 lakh crore rupees in July-September 2011, according to the Centre for Monitoring Indian Economy (CMIE). This is a decline of 64% in one year.
Output of capital goods declined by 15.2% in July. Compared to a growth of 4.7% in August 2010, it grew only by 3.9% in the same month this year. The repercussions of this on the economy are very evident and the long-term impact is going to be disastrous.
Asia360 News: If voted to power in 2014, what does the BJP propose to do to bring about a change in the current state of affairs?
NG: The BJP is developing an ‘India Vision Document 2025’. We have formed the team of experts, technocrats, economist and thinkers to deliberate and discuss our action plan for next 20 years.
We have formed small sub groups on more than 35 verticals such as Agriculture, Rural Development, Power, Infrastructure, Health, Primary Education, Higher Education, Irrigation, Women & Child Development, Environment, Urban Development, Non Conventional energy, Bio Fuels, God Governance, and Internal & External Security etc.
But most importantly, in a country where majority of people live in the villages, we would bring dignity to our villagers. This country has ignored agriculture and irrigation, with the result that poverty in the villages driven a good percentage of population to the cities. Cities do not have the infrastructure to deal with the influx as they are breaking at the seams. We propose to create quality infrastructure in rural areas.
Equally, we propose to have a sustainable philosophy of development. Realising that an increased demand of energy would be staring at us even as the reserves of fossil fuels deplete, the BJP would give a push to technologies that will use bio fuels and other alternatives.
Asia360 News: Which are the five key economic proposals that the BJP would to look to implement first, if it comes to power in 2014?
NG: We at the BJP believe that we can achieve 10% sustainable growth, which will not only benefit the industries but also create employment opportunities to millions of people in India.
To achieve that, I believe the biggest intervention is required in the field of agriculture. India should aim at achieving at least 4% agriculture growth over a long period. Improvement in agriculture situation in India will not only benefit this large population but will also enable them to consume more products and avail various services. This will have a positive impact on industrial and service sector as well.
I strongly feel diversification of agriculture towards energy and power sector holds key to change scenario of agriculture sector in India.
Second, creating world-class infrastructure is a prerequisite for promoting investments and industrial development. NDA government in 1998 embarked on one of the most ambitious National Highways Development Programmes anywhere in the world. We need to think about such ambitious projects in the areas of railways, inland waterways, ports and airports etc. to overcome infrastructure deficit. It will reduce transaction costs for the businesses.
Third, the BJP would pursue the agenda of education and skill development in mission mode. Private sector can play an important role in this. Out of box ideas like the scheme of distributing free bicycles to school going girls in Madhya Pradesh and Bihar by the respective state governments has done wonders in improving the enrolments and reducing dropouts substantially.
Fourth, I firmly believe that for the sustainable development “going green” is the only option. We will have to focus on renewable energy like solar, wind etc. to generate electricity. We will have to invest in the green technologies for our industrial sector.
Finally, and most importantly, I firmly believe that (economic) reform process is irreversible and the fast economic growth it has led to has actually pulled millions of Indians out of poverty. The BJP support reforms so that hassle free procedures for the businesses to operate and flourish are created.
Asia360 News: Do you believe that BJP’s opposition to the FDI in multi-brand retail might hurt its image of a business friendly party in the eyes of foreign investors? Do you believe it would hamper India’s growth story?
NG: It would be unfair to call BJP anti reforms. The 1999-2004 BJP government was at the forefront of reforms process in India. It had in fact initiated many path-breaking reforms in the form of disinvestment, telecom policies etc.
I think the world needs to understand that every country, while contributing to global growth, has to protect the interests of its own people.
The Indian economy, at present, is dominated by the services sector, which accounts for 58% of India’s GDP. Retail chains, both small and big, make a major chunk of that sector.
At the same time, self-employment in India is the single largest source of jobs. Foreign Direct Investment (FDI) agencies with deep pockets entering this segment will have an adverse impact on our domestic retail sector. It would be a bad move at a time when the domestic retail sector is growing anyway.
Asia360 News: Asia is growing faster than any other region of the world. Does the BJP have a separate vision for the continent, especially with regards China and regional bodies like ASEAN?
NG: India’s “Look East” policy was given impetus during the BJP-led regime under Vajpayee, who during his six-year tenure practically visited all the ASEAN countries to promote bilateral cooperation in the economic and cultural fields.
The BJP continues to attach highest priority to its relations with all the Southeast Asian countries with whom India has maintained centuries’ old cultural and spiritual ties.
As the two fastest growing economies, India and China hold great potential for cooperation based on their strong complementarities.
We in the BJP strongly believe that the two Asian giants, together with other ASEAN tigers, should strengthen cooperation and coordination, jointly deal with the challenges, and guard against attempts by the developed countries to shift the burden (of issues like carbon emission) to China, India, ASEAN nations and other developing countries.
At the same time, it is imperative that India and China overcome the existing problems in their bilateral trade such as the trade imbalance, limitations in trade scope and trade mix, and a low level of mutual investment.