Congress manifesto pushes rural help, jobs

Chief of ruling Congress party Sonia Gandhi speaks during the release of Congress party's manifesto for the April/May general election in New Delhi March 24, 2009.

NEW DELHI (Reuters) - The ruling Congress party said on Tuesday in its election manifesto that it would include a hugely subsidised food scheme in new measures to protect farmers and the poor from the impact of the global slowdown.

The proposals announced ahead of the April/May general election included guarantees by law that every family living below the poverty line would be entitled to 25 kg (55 lb) of rice or wheat per month at subsidised prices.

Economists may see the policy as a populist measure to win votes. Millions of Indians live in poverty.

Congress said it would extend interest relief to farmers and build on the national job guarantee scheme, both seen as potential vote winners.

The main battle in the April 16-May 13 ballot will be between a coalition led by the left-of-centre Congress Party and an alliance led by the Hindu-nationalist Bharatiya Janata Party, which has traditionally been more pro-business.

"When I look at the opportunities, I am convinced that this country can move forward on a road to faster, more equitable growth," Prime Minister Manmohan Singh said at the manifesto launch in New Delhi.

Congress chief Sonia Gandhi confirmed Singh as the party's choice to become prime minister if it wins the election, dismissing speculation that she, or her son Rahul, could head the government.

The global economic crisis has put pressure on Congress, which fears millions of jobs lost in the export sector could hit its electoral chances.

The Indian economy is expected to grow around 7 percent this year, down from 9 percent annually in the past three years.

But investors are worried that any populist schemes in an election year would widen a fiscal deficit that some analysts say has already risen to more than 10 percent of GDP.

The manifesto included plans to increase public spending in farming and remove all controls on the movement of farm products, measures aimed at the millions of farmers and villagers who make up more than half of India's 1.1 billion-plus population.

"They are going by a populist stance, giving essentials like wheat, rice," said political analyst N. Bhaskara Rao of the Centre for Media Studies.

Congress also said it would maintain government control over state-run firms in the manufacturing and finance sectors.

Traders say political uncertainty is weighing on stocks, but the manifesto did not have a direct bearing on the main BSE index, which was up around 1 percent in late afternoon trading.

Many polls show that the Congress-led alliance could beat the main opposition grouping led by the BJP, but it could still fall short of a majority in parliament.

The ruling Congress government gained power in 2004, but many of its economic reforms were blocked by its communist allies which supported the alliance in parliament.

(Additional reporting by Nigam Prusty and Matthias Williams)

(For more election-related online stories click here)