RPT-India policy body hirings signal socialist agenda

(Repeats story issued late on Monday)

By Bappa Majumdar

NEW DELHI May 31 (Reuters) - India has appointed several socialist intellectuals and activists to a powerful government policy advisory body, officials said on Monday, signalling the possibility of higher spending on costly social programmes.

The National Advisory Council (NAC) is headed by Sonia Gandhi, powerful chief of the ruling Congress party who is seen as more inclined toward favouring the predominantly rural poor to help boost the party ahead of some key state elections.

While higher spending may be cushioned by windfall gains from a recent auction of telecom spectrum, the risk is it could fuel rural demand, feeding inflation, already high, and increasing the pressure on the central bank to raise rates aggressively.

The NAC, formed in 2004, initiated social programmes credited with helping return the Congress party to power last year. The council has cleared 11 names, including a left leaning economist, social and human rights activists and former civil servants.

"They will try to advocate left-liberal policies. The appointments show that the Congress is still in favour of a socialist policy as opposed to a capitalist line," said political analyst Amulya Ganguli.

Those appointed, officials said, include economist Jean Dreze, former Planning Commission official N.C. Saxena, rights activist Farah Naqvi, former civil servant Harsh Mander and agricultural scientist M.S. Swaminathan.

MOST APPOINTEES HELPED GOVT PROGRAMMES

Most of the appointees have, in some capacity, helped the government give shape to programmes such as the rural job schemes and food security that won the Congress Party votes in the last election.

Gandhi is credit with creating some of the flagship schemes, including the rural jobs programme that already costs about 1 percent of GDP. She has overruled ministers to widen a food subsidy bill and is pushing a women's rights bill in parliament.

On issues of economic reforms, Indian media often report differences between her and Prime Minister Manmohan Singh, an economist credited with opening up India's heavily socialist economy in the 1990s.

Some analysts say the appointments signal a government willingness for a stronger oversight of its current social programmes rather than a push for fresh social investments.

Most central schemes still continue to elude millions of poor people. Experts say badly run programmes may add to deficit spending and hinder India from following rival China by broadening an economic boom to hoist millions from poverty to become well-fed middle class consumers.

"These are people with impeccable credentials and it signals the seriousness with which the government want to pursue inclusive economic growth and meet social commitments," said Siddharth Varadarajan of The Hindu newspaper.

The NAC will also likely influence domestic security policy in a country fighting a worsening Maoist insurgency.

The chair of the NAC holds the rank of a cabinet minister, allowing Gandhi to call for and work with government officials and documents. (Editing by Krittivas Mukherjee and Ron Popeski)