BJP warns of a slowdown

The Bharatiya Janata Party on Wednesday warned of creeping recession if the government did not rein in inflation, "which was never more than 4 per cent during Atal Bihari Vajpayee's prime ministership", and said it was the Left parties that were doing the backseat driving in the government's economic policy.

Emphasising a report issued by Deutsche Bank that had given the National Democratic Alliance government credit for running a successful and stable coalition, party president L K Advani in his speech put the blame on the politics of running a coalition and the Congress' inability to comprehend this.

The result was economic anarchy as the government was being pulled in different directions by competing interests in the government, including the Left, he said.

In its economic resolution, the party noted that inflation had doubled, important sectors like agriculture were being ignored and "if not corrected, these will push many sectors like housing, auto, construction and manufacturing into recession."

While bank deposit rates were two per cent below inflation, tax-free saving schemes were being "abruptly withdrawn", the party said.

"The United Progressive Alliance government's abject failure to formulate a coherent economic policy and to implement it resolutely is because, for the first time since Independence, the Congress has allowed the Communists to do backseat driving at the Centre.

They (Left) are arrogantly using their veto card on practically every important economic policy or decision," the resolution noted.

It further said agriculture production had fallen this year and progress on infrastructure development in power, railways, ports, highways and rural roads had "come to a stop".

"The NDA government's ambitious river-linking project has been given a burial," the party said. The resolution expressed concern about the rising oil import bill, but the only concrete idea it could offer was to ask the government to promote the production of bio-diesel and ethanol.

Referring to worsening fiscal situation of almost all states, the BJP asked the Centre to seriously consider a one-time waiver of all the old debts incurred by the state governments.

"The party urges the Centre to remove restrictions on states to raise non-Budgetary finances for development projects that are commerically viable," it said.

The BJP and all the BJP-ruled state governments would soon write to the 12th finance commission to raise the states' share in the central pool of tax revenues to 35 per cent, it added.

The party was also of the view that the commission should allocate a separate, dedicated stream of at least 5 per cent of central resources directly to panchayati raj institutions.