The Hindu Business Line : A common and minimum address

A PRESIDENTIAL ADDRESS to the joint session of Parliament is expected to lay down the short-to-medium-term legislative and executive priorities of the government. By that yardstick, the Monday address by the President, Mr A. P. J. Abdul Kalam, falls short by a long margin with the odd definitive commitment on legislation interspersed with vast amount of inane generalities. Thus, while it speaks of repealing POTA (oddly enough, without committing itself to a time frame), elsewhere it is content with such platitudes as being committed to the orderly development and functioning of the capital market or enabling the textile industry meet the challenges posed by the abolition of quotas in January 2005. It would not be too far wrong to describe it as the United Progressive Alliance's Common Minimum Programme under a different label.

POTA apart, even where the address clearly articulated its vision of governance there is bound to be some scepticism over whether it has an idea of the difficulties ahead or the strategies needed to overcome them. It has spoken of increasing public spending on health to at least 2-3 per cent of GDP. The 50 per cent flexibility (from 2 per cent to 3 per cent of GDP) in the spending target, especially when the difference could translate into something like Rs 25,000-30,000 crore, should be a source of concern. But the absence of any discussion on the factors contributing to poor allocation or the kind of trade-offs in sectoral allocation or the strategies to boost resources make it doubly so. A similar criticism could be levelled against the target for spending on education, pegged at 6 per cent.

Having said that there is something in the address for the business community to cheer. It can take some solace from the Government's commitment to keep the tax rates stable. This is no mean achievement as the market had been spooked by all this talk of huge increases in outlays for social sector programmes which the business community has always interpreted it as higher taxes ahead. Equally, there is formal recognition that the labour laws need changes for the manufacturing sector to realise its growth potential. But the resolve that it would usher in changes after consultations with the industry and the trade unions is bound to render non-starter any legislative initiative on an `exit' policy. The trade unions are unlikely to accept any institutional mechanism for closure of unviable industrial units. But the discussion might nevertheless help create a climate where decisions on closure of specific units are taken rationally, securing some quick relief for workers instead of letting them suffer a long-winded legal process. .

The address, significantly, signals a determined bid by the Congress to regain the lost ground among the Dalits and religious minorities. It speaks of a commission to address the issues of minority communities and reservation of jobs in the private sector for Scheduled Castes and Tribes. True, the path to actual implementation will be strewn with practical and legal difficulties. Nevertheless, it is an attempt by the Congress to position itself in this political space. This may lead it into conflict with its allies which had moved into this space vacated by the Congress earlier.