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| Wednesday, 4 February 2004 |
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India govt woos farmers, middle class ahead of poll NEW DELHI, Tuesday (Reuters) India's ruling Hindu nationalists are expected to court crucial rural and middle class voters with a cautiously reformist interim budget on Tuesday in the countdown to early elections. Analysts say Finance Minister Jaswant Singh's second budget will seek to tread a path between fiscal responsibility and last-minute sweeteners before an April-May poll his Bharatiya Janata Party-led coalition is expected to win. "It will be a largely keep-the-system-going fiscal plan. I don't think there will be any major announcements," said Sanjeev Sanyal, an economist with Deutsche Bank in Singapore. Singh is constrained both by political convention and by an unsustainably high fiscal deficit from making major changes. But he is expected to push through modest measures such as an increase in spending on infrastructure for the farm sector, which supports almost three quarters of India's more than one billion people and contributes a quarter of Gross Domestic Product (GDP). India's burgeoning middle class - estimated at more than 200 million - is expected to gain from tariff cuts, an increased duty free allowance and adjustments to income tax brackets. And the government is likely to adjust the wage formula for its five million civil servants, some of whom will staff polling stations, in a way that would boost future increases. Parliament will be dissolved on Saturday, but the independent electoral commission has yet to set dates for voting, expected to be staggered over several weeks, possibly from April into May. With growth among the fastest in the world - 8.4 percent in the third quarter of 2003 - bumper harvests, gains in recent state polls and prospects of peace with nuclear rival Pakistan, surveys show the BJP gaining in the elections. A poll in the latest India Today newsweekly forecasts the ruling coalition will win 330-340 of the 545 lower house seats, up from 303 in the outgoing parliament. After riding to power on a hardline Hindu revivalist campaign, the BJP is now campaigning for re-election on its economic management and the strong popularity of 79-year-old Prime Minister Atal Behari Vajpayee. Reform is now an electoral plus, more than a decade after the slow and often painful and unpopular process began. "People are beginning to see the benefits of these reforms," said Sanyal. "The benefits of growth are feeding through in many parts of the country. The benefits... are now much more palpable." The government has launched a last-minute advertising blitz before parliament is dissolved and the BJP becomes a caretaker administration. |
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