Chapter V : Agenda For Economic Action
1. Control of Inflation: ... The Congress believes the inflation and price-rise of essential commodities ... is a grave macroeconomic problem facing the country today. It has hit worst the poorest and weakest sections of our people and those with fixed incomes like pensioners. The Congress will give the highest priority to maintaining the prices of essential commodities, increasing their production and supply using all appropriate economic instruments.
2. Macroeconomic Policy Framework: To control inflation of the general price-level, the Congress will provide a predictable long-term policy framework. The average Indian household and business will not have their lives and plans disrupted by sudden changes in economic policy. Coherent monetary policy measures will be defined as called for by the Report of Experts of the Reserve Bank of India in 1985. The Long-Term Fiscal Policy introduced by the Congress Government of 1984-1989 will be revived. Medium and long-term export-import policies will be defined.
The basis for a strong India must be a strong economy. The Congress believes a high rate of real growth is essential for securing a strong national defence, social justice and equity, and a civilised standard of living for all. As the party of self-reliance, Congress believes resources for growth must be generated from within our own economy. This means all wasteful and unproductive government spending has to be cut, and resources transferred from areas of low priority to areas of high national priority. Subsidies have to be rationalised and reduced, and productivity of investments already made has to be improved. The widening gap between revenue receipts and revenue expenditure must be corrected through fiscal discipline, and the growing national debt brought under control as a matter of high priority.
These policies in a consistent framework will create the environment for the freeing of the rupee in due course, making it a hard currency of the world of which our nation can be proud. Public resources are not unlimited. These have to be allocated to high priority areas like essential public services, poverty-reduction, strategic sectors and protection of the interests of the weaker sections of society.
Government has to leave to the initiative and enterprise of the people what can be best done by themselves. Government can now progressively vacate some areas of activity to the private, cooperative and non-government sectors. Black money in the parallel economy has become the plague of our economic and political system. This endangers the social and moral fabric of our nation. Artificial price controls, excessive licensing, capacity restrictions, outmoded laws on rent control and urban ceiling, and many other outdated rules and regulations have contributed to pushing many honest citizens into dishonest practices.
The Congress will tackle the problem of black money at its roots by attacking all outmoded and retrograde controls, and simplifying procedures in all economic spheres.
At the same time, the tax-base of the economy must be increased via simplifications and rationalisation of tax-rates and coverage, user-fees for public goods, and reduction of taxes wherever possible to improve incentives and stimulate growth.
3. Panchayati Raj: India’s farmers and khet mazdoors are the backbone of our economy. Economic development is meaningless until their villages provide them a wholesome rural life. The Congress will revitalise Panchayai Raj institutions to decentralise decision-making, so that development can truly benefit local people most effectively.
4. Rural Development: Basic economic infrastructure like roads, communications, fresh drinking water, and primary health and education for our children must reach all our villages. The Congress believes such a policy will also relieve pressures from migration on our towns and cities ...
Through the Green Revolution which the Congress pioneered over 25 years, our farmers have prospered. Now our larger farmers must volunteer to contribute more to the national endeavour, and hence to greater equity and overall economic development. Equity demands land revenue should be mildly graduated so that small farmers holding less than one acre pay less land revenue per acre ...
9. Education and Health: The long-run prosperity of our nation depends on the general state of education, health and well-being of our people. Small families give themselves more choice and control over their own lives. Improving female literacy, promoting the welfare of nursing mothers and reducing infant mortality will have a direct bearing on reducing the birth-rate and improving the health and quality of all our people.
Primary and secondary education has high social returns and is the best way in the long-run for achievement of real equality. Efforts will be made to reduce the cost of education for the needy through concessional supply of books and other study materials, scholarships and assistance for transportation and residential facilities.
The Congress Party pledges to dedicate itself to promoting education, especially in rural areas and especially for girls and the weaker sections of society. The next Congress Government will prepare and launch a 10-year programme for introduction of free and compulsory primary education for all children of school age. It will continue to emphasise vocational bias in education, integrating it closely with employment opportunities ...
11. Industrial Efficiency: Our industrial base in the private and public sectors are the core of our economy. What we have achieved until today has been creditable, and we are self-reliant in many areas. Now the time has come for industry to provide more efficiency and better service and product-quality for the Indian consumer.
The public sector has helped the Indian economy since Independence and many national goals have been achieved. Now it has become imperative that the management of public sector units is made effective, and their productivity increased.
Major steps must be taken for greater accountability and market-orientation. Failure to do this will make our country lose more and more in the international economy. Budgetary support will be given only for public sector units in the core and infrastructure sectors. Emphasis will be on improving performance and productivity of existing investments, not on creating added organisations or overmanning. Units not in the core sector will be privatised gradually. Even in core sectors like Telecommunications, Power, Steel and Coal, incremental needs can be taken care of by the private sector. The Government-Enterprise interface must be properly defined in a White Paper.
The Congress believes privatisation must distribute the profits equitably among the people of India. In order to make our public enterprises truly public, it is essential that the shares of many such enterprises are widely held by the members of the general public and workers. Congress pledges to allot a proportion of such shares to the rural Panchayats and Nagarpalikas. This will enhance their asset-base and yield income for their development activities, as well as improve income-distribution.
12. Investment and Trade: Indian industry, Government and professional managers are now experienced enough to deal with foreign companies on an equal footing, and channel direct foreign investment in desired directions. Foreign companies often bring access to advanced technological know-how, without which the nation cannot advance. The Congress Government will formulate a pragmatic policy channelling foreign investment into areas important to the national interest. Every effort must be made also to encourage Indians who are outside India to invest in the industry, trade and real estate of their homeland.
Because of the protected and inflationary domestic market, Indian industry has become complacent and the incentive for industrial exports has been weakened. When all production is comfortably absorbed at home, Indian industry makes the effort to venture into exports only as a last resort. This must change. A Congress Government will liberalise and deregulate industry to make it competitive and export-oriented, keeping in mind always the interests of the Indian consumer in commercial policy.
Export-oriented and predictable commercial policies will be encouraged. Existing procedural constraints and bottlenecks will be removed. Quotas and tariffs will be rationalised. Thrust areas for export-development will be identified and monitored. Efforts will be made to develop a South Asian Community. Trade and economic cooperation among South Asian countries must be increased and simplified.
This March 22 draft of the Congress’s intended economic policies got circulated and discussed, and from it rumours appeared that the Congress party was planning to launch a major economic reform in India which had been exactly the intended effect. When I met Manmohan Singh via S. S. Ray in September 1993 in Washington, Ray told him and his senior aides the Congress manifesto had been written on my computer. Manmohan Singh smiled and said that when he had been challenged by Arjun Singh and other senior members of the Congress, he had pointed to the manifesto. Yet, oddly enough, the published Congress manifesto in April 1991 was as tepid and rhetorical as usual, as if some party hack had had a loss of stomach for the real thing at the last moment. It was the March 22 draft which got discussed and circulated, and the Indian economic reform since July 1991 corresponded in certain basic ways to its contents as reproduced above, specifically the bold change of attitude towards economic policy that came to be signalled by Narasimha Rao. Rao himself (who, before the elections, had been due to retire), initially claimed authorship of the reform until January 1995, when he publicly acknowledged he had received the materials from Rajiv Gandhi. Manmohan Singh has not (except when he ran for Parliament) claimed to have been the author of the reforms but said he received the change of direction from the Prime Minister who had appointed him Finance Minister. Jairam Ramesh has recently claimed that from June 1991 onwards, he and Pranab Mukherjee were invited by Rao to write the reform. In truth, as I experienced it, the change of direction came to occur when a young progressive Leader of the Opposition and Congress President met an even younger academic who had with him a completed perestroika research project designed for India. The academic had also predicted to those around the leader that the leader seemed to be very vulnerable to terrorism. But nobody listened.
This article is dedicated to Mihir and Purnima Roy, and the memory of Suchandra Bhattarcharjee.

Dr. Subroto Roy gained a First at the LSE and received the PhD of the University of Cambridge in 1982 for his thesis On Liberty and Economic Growth: Preface to a Philosophy for India. Dr. Roy’s works include ‘Philosophy of Economics: On the Scope of Reason in Economic Inquiry’. He is Professor at IIT Kharagpur’s Vinod Gupta School of Management since 1996. Dr. Subroto Roy is a member of the Indian Liberal Group.