The Congress party has released its manifesto titled ‘Nyay Patra’ for the 2024 Lok Sabha elections. In keeping with its philosophy of distributive justice and equality, the manifesto incorporates ‘Paanch Nyay’, comprising ‘Yuva Nyay’, ‘Naari Nyay’, ‘Kisaan Nyay’, ‘Shramik Nyay’, and ‘Hissedari Nyay’, besides 25 guarantees already promised by the Party. The Party which believes that caste is the major determinant of inequality has pledged to conduct a nationwide socioeconomic and caste census.

It has also vowed to remove the 50 per cent cap on reservations for SC, ST, and OBC communities through constitutional amendment, apparently creating a mechanism for reservation of all jobs based on the population of respective castes, reflecting Rahul Gandhi’s assurance of “Jitni abadi utna haq”. Each party follows its own ideology and makes promises according to it.

I am sure many people subscribe to the Congress ideology who will of course vote for it. Whether it will sway the election results in its favour, we know not. It is dangerous to make predictions about the outcome of an election, and growth is not always the determining factor, as we saw in 2004. The Indian economy has shown remarkable resilience under the NDA regime in a conflict-ridden world struggling hard to cope with the prospect of global recession, but again this is no guarantee that NDA will be returned to power with the kind of majority that it claims.

BJP has just released its manifesto, “Modi ki Guarantee Sankalp Patra”, an elaborate 76- page document listing out in detail its achievements during the last 10 years, and containing 30 promises spread over 14 pillars, focusing on women, youth, poor and farmers, besides implementation of its unfinished nationalist agenda like One Nation, One Election, UCC, and a guarantee to make India the third-largest economy in the world. It also has plenty of populist promises like free ration under PM Garib Kalyan Anna Yojana, free electricity to poor households, expanding the scope of Ayushman Bharat, etc., while the emphasis remains on economic growth.

There are many who subscribe to this philosophy and will vote for it. This article is not about telling people to vote for a particular ideology ~ people will of course vote according to their conscience. Every election promise leads to allocation of resources and their redistribution from one sector to another. This article is only about considering the economic costs of the promises made in the Congress manifesto, though in public policy, social equity and justice often outweigh economic rationality.

Besides the caste census, some key promises made in the manifesto include filling some 30 lakh vacancies in sanctioned posts in the Union government, legal guarantees to MSP as recommended by the Swaminathan Commission, launching a Mahalakshmi scheme to provide Rs 1 lakh per year to every poor family, abolishing the Agnipath scheme for defence recruitment and implementing the Rajasthan model of cashless insurance of up to Rs 25 lakh for providing universal healthcare.

The economic costs of these promises merit closer scrutiny. The Socio-Economic Caste Census (SECC) is old wine in a new bottle; the UPA government had earlier conducted it in 2011- 12 through a door-to-door enumeration survey. It threw up a humongous 46 lakh castes and subcastes ~ implying that only 72 households constituted a sub-caste.

The enormous number made it prima facie unusable for policy making, and its results were never made public. Though the NDA government is understood to have used it to extend welfare benefits to the poor, another similar exercise, and expensive one at that, is unlikely to produce much different results to help any government better target its welfare benefits. Indeed, the assumption that caste is synonymous with backwardness may rest only in the imagination of politicians and social scientists in a rapidly modernising India, like its imagined impact on the outcome of elections.

The promise of caste census had failed to sway voters in recent assembly elections in three Hindi heartland states where caste is supposed to be a determining factor in socio-political outcomes, as the social scientists would make us believe. Regarding the 3 million government vacancies, it is doubtful whether all these vacancies actually need to be filled ~ technology has already replaced many routine jobs.

Even at the lowest pay scale, this will cost the exchequer some Rs 1.4 lakh crore a year, without considering the overheads and perks available to government employees. This will bloat the size of government and increase its expenditure manifold. No doubt, youth employment remains a major problem in India as the recent ILO-IHD survey has pointed out; even many IIT graduates have failed to find placements this year.

But this may be more due to lack of the right sort of skills rather than avenues of employment; besides, a modernising economy expects the government to facilitate creation of jobs by the private sector rather than becoming the chief provider of jobs itself, for treasons of efficiency and productivity. Technology ~ especially AI ~ has already rendered much of our traditional skilling curricula and methods obsolete, and technical and educational institutions need to reinvent themselves to cope with this new-age crisis. Even in 2019, Congress had made similar promises, besides pledging a Nyuntam Aay Yojna of Rs 72,000 every year to 20 per cent of India’s poorest citizens, though these failed to enthuse voters.

The manifesto is blissfully silent about the means of financing the costs of its promises, leaving the only option of high fiscal deficits (FD) and consequent heavy borrowing, though it makes a vague promise, without any roadmap, to double the GDP growth in the next 10 years ~ the underlying assumption being that the growth will find the necessary resources. If history is any guide, the UPA regime’s socio-economic policies were based on delivering social justice through costly programmes like the Food Security Act or MNREGA, which led to high FDs and large government borrowing which crowded out private borrowers.

This caused inflation and raised the cost of capital to private sector, affecting employment and economic growth. Doubling the GDP requires only a small primary deficit, and high subsidies as would be needed to pay Rs 1 lakh per year to every poor family would lead the country to larger primary deficits and still higher borrowings, sacrificing the GDP growth. UPA’s Food Security Act which provides heavily subsidised foodgrains to almost two thirds of India cost Rs 2 lakh crore during 2023-24; MNREGA, another UPA brainchild, cost the nation Rs 1 lakh crore in FY 2024.

Backed by statutes, these are obligatory expenditure for any government, and their huge opportunity costs for creating productive capacity in the economy will continue to haunt our public finances. Providing legal guarantees for the Swaminathan formula for MSP means that the prevailing market price of foodgrains cannot be lesser than the MSP. This would inevitably lead to a food crisis. MSP is presently provided on 50 per cent margin on a formula called A2+FL, A2 being the cost actually incurred by farmers and FL being the imputed cost of labour put in by a farmer family during the cropping season. The Swaminathan formula would change it to 50 per cent over C2, C2 being the comprehensive cost derived after adding the interest on fixed capital used in agricultural operations and the rental value of the farmer’s own land to the A2+FL cost.

In simple terms, this means a net 50 per cent margin on the sale of foodgrains and consequent increases in foodgrains prices, affecting both domestic consumption and exports, to avoid which the government must be the sole procurer through unsustainable subsidies. No business can sustain a 50 per cent profit, guaranteeing this would be a sure recipe for ruin. The Agnipath Scheme was introduced to curtail defence pension expenditure which had reached unsustainable levels, seriously jeopardising national security. In 2022-23 when it was launched, defence pension accounted for Rs 1.53 lakh crore and defence salary Rs 1.62 crore, these two accounted for 54 per cent of the total defence budget.

If a country spends less than 50 per cent of its defence budget on actual defence needs for procurement and infrastructure, it must be heading for an inevitable security disaster, and the scheme was introduced just to avert such a disaster. Rolling it back would be reopening the road to this disaster. The universal healthcare through insurance up to Rs 25 lakh replaces NDA’s Ayushman Bharat which provides Rs 5 lakh cover for the poorest 50 crore households through private hospitals. Ayushman Bharat scheme has so far consumed nearly Rs 80,000 crore since its inception in 2018.

While it has certainly benefited poor families hitherto uncovered by any health insurance, only the unregulated and unscrupulous private healthcare providers have reaped the harvest of huge profits at public cost, while the status of public healthcare remained as dismal as ever. If a part of this money could be spent on them, the landscape of public health in India could have been transformed today.

Experiences of advanced countries tells us that universal coverage becomes feasible and sustainable only when the quality of public healthcare matches that of the private, for which there would never be enough funds if the Congress manifesto is to be implemented, as it would consume an additional Rs 40,000 crore at conservative estimates. It is not that the manifesto does not have any good points, there are in fact quite a few, including the promise of a new single rate GST regime, or increasing health spending to 4 per cent of budget. But without adequate growth, nothing can be achieved, and here the manifesto falls short.

(The writer is a commentator, author and academic. Opinions expressed are persona)