Winners and losers of India's poll manifestos

New Delhi

INDIA'S farmers and the poor stand to gain irrespective of whether Prime Minister Narendra Modi wins a second term or his main opponent Rahul Gandhi wrests power in elections starting this week. The biggest losers will be loan defaulters-on-the-run.

Poll promises of both Mr Modi's Bharatiya Janata Party (BJP) and Mr Gandhi's Indian National Congress include spending billions of dollars to provide income support to the poor and farmers. A closer review of their manifestos shows many others who are poised to win and some who may end up losers.

WINNERS

Infrastructure builders: Both the parties pledged to boost spending to build highways and airports, and to modernise railways and cities. The BJP's pledge to spend US$1.44 trillion on infrastructure will benefit builders including Larsen and Toubro Ltd, India's biggest engineering company, which saw a 12 per cent drop in new orders in the December quarter as economic growth during the period cooled to the lowest in six quarters.

Manufacturers: The Congress vowed to take the share of manufacturing in the nation's GDP to 25 per cent from the current 16 per cent, while the BJP plans a new industrial policy to raise the competitiveness of local manufacturers and services companies.

"There's sluggishness in private investment and something has to be done," said Indira Rajaraman, an economist and a former member of the Reserve Bank of India's board. "It's good that they have the intention of boosting private investment."

That's good news for the likes of ITC Ltd, a hotels-to-tobacco conglomerate; Bharat Heavy Electricals Ltd, a homegrown power equipment maker; and Tata Steel Ltd, which saw demand from the automobile sector ease in the December quarter amid tight money conditions in the economy and elevated fuel prices.

Exporters: India's exports, which have seen a sequential easing in growth rates in the four months through February, are set to get a leg-up with both the Congress and the BJP promising measures to promote trade.

Start-ups: With jobs being a key election issue in a nation where 12 million youth enter the workforce every year, both parties have committed to fostering entrepreneurship. The BJP promised collateral-free loans and regulatory easing for start-ups, while the Congress plans to create an Enterprise Support Agency and remove the angel tax - a levy collected from start-ups on fundraising.

Farmers: One of the biggest winners in the pack are, not surprisingly, farmers. At 263 million, they form a key voting bloc in the world's largest democracy. The BJP has promised 6,000 rupees (S$117) a year in income support to some farmers, besides pension and interest-free loans. The Congress's plan involves waiving off farm loans, besides giving 72,000 rupees a year to 50 million of the nation's poorest.

LOSERS

Fugitive loan-defaulters: Billionaire Nirav Modi, who allegedly defrauded an Indian bank of US$2 billion, and ex-billionaire Vijay Mallya may be the biggest losers of this election. Both are currently based in the UK after fleeing their home country. Mr Modi and Mr Gandhi have assured voters that loan defaulters and fraudsters will be dealt with swiftly by Indian courts.

Unemployed: The BJP's manifesto, surprisingly, doesn't lay out a specific road-map for creating jobs, other than a plan to boost entrepreneurship. The Congress's plans to fill 400,000 vacant federal government posts and create 10 million low-skilled jobs fall short of addressing India's unemployment, which according to a leaked report is at a 45-year high.

Land reforms: There is no mention of land and labour reforms in the BJP's manifesto. These are major issues for investors, who find it difficult to acquire land from people and also hire and fire employees. BLOOMBERG