CMP blurs with CPM, reforms soft focus

In the fine print, however, the CMP8212;its 16-page draft authored mainly by Pranab Mukherjee and Jairam Ramesh was circulated among the allies8212;leaves some room for flexibility even as it shows the Left8217;s hand in its writing.

No wonder the CPM and the CPI welcomed it today saying that although it will be discussed with the allies and the Congress, it agreed with it 8216;8216;more or less.8217;8217;

What Prime Minister-designate Manmohan Singh called 8216;8216;reforms with a human face8217;8217; yesterday is translated into a package of proposals: a law guaranteeing 100 days of minimum-wage employment to every rural household, a national health insurance scheme for the poor, farm insurance schemes, rural credit and 8216;8216;protective legislation8217;8217; for all agricultural workers.

On education and health, the two sectors in dire need of reform, the CMP proposes increased spending: a cess on central taxes to increase public spending on education to 6 of the GDP from the current 3.5. And an increase in expenditure on health to 2 of the GDP over the next five years.

On the sticky issue of disinvestment, the CMP tries to walk the tightrope saying that privatisation of PSUs will be on 8216;8216;a case to case basis8217;8217; adding: 8216;8216;The UPA United Progressive Alliance will retain ONGC, IOC, HPCL, BPCL, GAIL, NTPC, SAIL and BHEL in the public sector, while disinvestment takes place.8217;8217;

Assuring to give 8216;8216;full managerial and commercial autonomy to successful, profit-making companies operating in a competitive environment,8217;8217; the draft CMP says that chronically loss-making companies will either be sold off or closed after all workers have got their compensation.

As Singh said yesterday, the CMP allows PSUs and nationalised banks to 8216;8216;enter the capital market to raise resources and offer new investment avenues to retail investors.8217;8217;

The draft CMP8217;s other salient points:

8226; Govt will increase tax-GDP ratio via major tax reforms that expand the base of taxpayers, increase compliance. Tax rates will be stable and conducive to growth and investment.

8226; FIIs will continue to be encouraged and incentives to boost private investment will be introduced.

8226; The country needs and 8216;8216;can easily absorb at least the two to three times the present level of FDI inflows.8217;8217;

8226; A National Manufacturing Competitivesness Council to provide a continuing forum for policy dialogue to 8216;8216;energise and sustain8217;8217; the growth of manufacturing sector.

8226; A growth rate of 7-8 a year and a commitment to economic reforms that stimulates growth, investment and employment.

8226; Continuing the peace process with Pakistan, 8216;8216;independence8217;8217; of India8217;s foreign policy on all regional and global isues 8216;8216;even as it pursues closer strategic and economic engagement with the USA.8217;8217;

8226; On WTO, the draft CMP says the government 8216;8216;will use flexibility afforded in existing WTO agreements to fully protect Indian agriculture and industry.8217;8217;

8226; Public investment in agriculture and irrigation will be stepped up in a significant manner 8212; particularly in the Central and eastern regions.

8226; The rural cooperative credit system 8212; a throwback to the 8217;70s when Indira Gandhi had an alliance with the Left 8212; will be back with 8216;8216;flow of rural credt doubled in the next three years covering small and marginal farmers8217;8217;.

8226; No reversal of the privatisation programmes underway in infrastructure sectors.

8226; A National Employment Guarantee Act to provide legal guarantee for at least 100 days of employment on 8216;8216;asset-creating public works programmes8217;8217; at minimum wage.

8226; No 8216;8216;automatic hire and fire8217;8217; policy but 8216;8216;flexibility8217;8217; to industry in the matter of labour policy ensuring that workers8217; interests are protected.

8226; Given POTA8217;s misuse, it will be repealed and existing laws strictly enforced.

8226; A law on communal violence providing for investigations by a central agency and prosecution by special courts.