BJP makes bid for middle-class vote

PUBLISHED : Saturday, 10 January, 2004, 12:00am
UPDATED : Saturday, 10 January, 2004, 12:00am

Indian government slashes duties on consumer goods, a sign the ruling party wants an early election

An early general election is now almost certain following yesterday's virtual mini-budget aimed at pleasing middle-class voters by making fridges, cell phones, washing machines, luxury cars, computers and DVDs much cheaper.

Finance Minister Jaswant Singh slashed the duties on a range of products. Corporate India was also blessed, with customs duties cut from 25 to 20 per cent on all non-agricultural goods and the abolition of a 4 per cent surcharge on customs duty.

Mobile phones, for example, will be 8-10 per cent cheaper. 'I expect to see the market grow by about 30 per cent,' said Pankaj Mohindroo, president of the Indian Cellular Association.

Air travel also becomes more affordable. Owing to the abolition of various taxes, fares are now 15 per cent cheaper, making travelling by plane cheaper than by first-class train. The two private airlines - Jet and Sahara - immediately passed the benefit of cheaper aviation fuel onto customers by announcing reduced fares.

The general election is scheduled for September but speculation that it would be brought forward has been mounting since the ruling Bharatiya Janata Party (BJP) enjoyed victory in three provincial elections last month.

It also is keen to profit electorally from the economic boom, engendered by 7 per cent growth. This has triggered an explosion in consumer spending and a general 'feel-good' sentiment that may, the BJP fears, dissipate if it waits until September.

Another factor it wishes to capitalise on is the recent breakthrough in relations with Pakistan that came at the South Asian Association for Regional Co-operation summit in Islamabad. The hope is that Prime Minister Atal Behari Vajpayee will take personal credit for the agreement by both countries to start talks.

An election is now likely in late April or May. The BJP's partners in the ruling coalition have approved the idea and authorised Mr Vajpayee to decide the exact timing.

Opposition parties decried the bonanza for consumers and industry. 'The BJP is in a hurry to hold an election so they are distributing doles to the middle class without bothering about the common man,' said Harkishan Singh Surjeet, of the Communist Party (Marxist) of India.

Congress leader Jairam Ramesh called the measures 'pure, short-term politics'.

His party's biggest worry now is whether it can assemble a coalition of allies that can take on the BJP's formidable alliance in the election.

This necessity has compelled party president Sonia Gandhi to end her splendid isolation and alter her aloof demeanour by becoming more accessible. She has been telephoning and meeting numerous regional party leaders who might be willing to ally with her to defeat the BJP.

Even if they are willing, however, the next hurdle is agreeing on a common agenda because their ideologies and priorities are bound to differ considerably.