FM Sitharaman criticises Congress manifesto as fiscally imprudent

Finance Minister Nirmala Sitharaman on Thursday slammed the Congress election manifesto as fiscally imprudent, highlighting that people understand which dispensation can effectively implement electoral promises and the financial repercussions of such commitments.

“People understand who can actually implement the promises and what will be financial implications of such promises when implemented”, Sitharaman said in an interview to TV Channel CNBC Awaaz ahead of the first phase of polls beginning on April 19.

Sitharaman said that Congress has made “irresponsible” promises such as unconditional transfer of ₹ 1-lakh per year to each poor family without indicating as to how this will be funded. 

No clarity

She noted that these promises are intended to create “temptation” and “confusion” among the people. Also there is no clarity on how this would be funded in the subsequent years.  “Congress has been exposed 3-4 times for making such attractive promises and not delivering them”, Sitharaman said.

She was responding to query on fiscal promises in the Congress manifesto, which leaned on populism, and how it compared with the BJP manifesto that promised policy continuity rather than Big Bang fiscal reforms.

Sitharaman pointed out that a manifesto doesn’t reveal a party’s capacity to fulfill its promises.

“For instance, Congress made such ‘attractive promises’ before coming to power in states like Himachal Pradesh and Karnataka … you can see that in the last one year … Karnataka CM and cabinet ministers have only been blaming PM Modi for not having enough money to implement their programmes,” Sitharaman said.

The same thing happened in Rajasthan, she added.

“The then CM Ashok Gehlot said they will revert to Old Pension Scheme and scrap the new one. But there’s no word on that anymore … the party has not even mentioned it in their current manifesto … they are saying it will be premature [to implement it]”, Sitharaman said.

She said that people of the country can differentiate between those who just make promises and those who can actually deliver them. “Congress has been exposed 3-4 times for making such attractive promises and not delivering them,” she said.

Nyay Patra

In its 45-page manifesto titled ‘Nyay Patra’, the Congress focussed on five “pillars of justice” and 25 guarantees under them.  A legal guarantee for MSP, Right to apprenticeship, passing a constitutional amendment to raise the 50 per cent cap on reservations for SCs, STs and OBCs, a nation-wide caste census and scrapping of Agnipath scheme are among the promises made by the Congress party in its ‘Nyay Patra’ (manifesto).

BJP’s manifesto —Modi Ki Guarantee 2024— announcements foresee limited fiscal implications, while the Congress document — as most opposition election manifestos go — entailed significant fiscal costs, which could lead to sharp widening of fiscal deficit, said economists soon after the poll manifestos were released.

Fiscal expansion (as proposed by the Congress) will hurt the macro stability narrative and could delay the private corporate capex recovery, Swiss investment banking firm UBS’ analysts warned.