The Common Minimum Programme (CMP) of the new alliance at the Centre stands out more for what it leaves out rather than for what it states. In an effort to reach a consensus within the members of the coalition, the CMP has announced some populist steps which might have adverse effects, say a number of economists and market analysts who spoke to The Indian Express.However, most of the economist felt that in spite of a not-so-proactive CMP, the Indian economy can still achieve a 7 to 8 per cent growth in gross domestic product (GDP) given its inherent strengths and strong fundamentals. Populist steps like a 2 per cent cess on central tax to fund education and guaranteed employment at minimum wage have raised doubts in the mind of the economists regarding feasibility. Talking to The Indian Express, Suman Berry of the National Council of Applied Economic Research (NCAER) said that the CMP leaves out crucial issues ‘‘like that of public debt and fiscal deficit’’. Criticising the CMP’s diluted on WTO, Berry said that the stand of the new government on WTO seems to be defensive. ‘‘This was a right opportunity to balance growth and trade liberalisation along with the well-being of the poor,’’ he said. Berry said that while the step to implement guaranteed employment is welcome, what is surprising is the plan to do it at the minimum wage. ‘‘This would put an additional burden on the government and would be expensive,’’ he added. The CMP has also not looked into agriculture support system properly, Berry added. The move to put a 2 per cent cess on central taxes to fund agriculture might not the be right manner to garner revenue for the purpose he said. Saumitra Choudhury, an economist with ICRA, was also critical of the 2 per cent cess. According to Choudhury, the step is a retrograde one and would not only have inflationary trends in the long run but would also destabilise the tax structure.According to economist and managing director of Oxus Research and Investment, Surjit Bhalla, ‘‘The CMP is not a policy document. We have to wait for more policy announcements and the budget to have a more clear idea’’. However, Berry, Bhalla, Choudhury and stock market analysts were of the opinion achieving 7 to 8 per cent growth is possible given the inherent strength of the economy. Berry added, ‘‘A 7-8 per cent growth is possible and I do not find anything in the CMP which would make it impossible’’.But stock brokers and market analysts are not elated with the CMP. Said Vipin Agarwal, director of Longview Research and Advisory Services (which are consultants for FIIs), ‘‘The CMP fails to stand out for something special. I do not see any proactive steps to attract FIIs or investors to the market’’. In fact, Agarwal was of the opinion that the step to do away with a labour policy on hire and fire would be detrimental for the private sector.A few brokers of the NSE, on condition of anonymity, were also of the opinion that the CMP is far from being unique and there is nothing which would give the market a feel-good factor. ‘‘CMP alone would not be able to boost the market. We need more pro-active steps’’, brokers added.
