Are election manifesto of political parties relevant?

Indians have begun voting in the world's biggest election. The nine-phase ballot begins today and concludes on 12 May Votes will be counted on 16 May Some 814 m voters, 100 m more than at the last elections in 2009 are eligible to vote at 930,000 polling stations, up from 830,000 polling stations in 2009. 

In their anxiety to win the Lok Sabha election, Indian political parties promise the moon in their manifestos. Every political party comes out with a manifesto containing glorious promises at election time. One wonders whether the average voter even knows about the existence of such texts or understands their implications. 

The two main national parties (Congress and BJP) have released their manifestos. Let us look at some of the main highlights of their manifestos. The Congress manifesto promises a new right to health, policies to lift 800 m people into the middle class and GDP growth rate of more than 8% in the next three years. The Congress also promised an agenda to create 100 m more jobs for the youth. On the question of reviving economic growth, which had decelerated in the last few years of the Congress-led government, the party's manifesto is categorical about a host of progressive measures such as those on a flexible labour, expeditious introduction of GST and the simplified direct taxes code, both of which should enhance the economy's efficiency. 

After an embarrassingly long delay, the BJP finally released its manifesto today. The party has listed its objectives in various categories. The party will immediately attend to inflation, employment, entrepreneurship, bringing back black money in foreign accounts and tackling policy paralysis. In its promises to tackle corruption, the BJP has said that it will focus on public awareness, e-governance and rationalisation of the tax regime. The party also promised to bring the GST tax regime in the country and while re-affirming its stand on no FDI in multi-brand retail, said it was open to FDI in all other sectors to raise employment in the nation. 

Election manifestos may have lost their earlier importance. But a closer look at them does reveal a lot about a political party's own assessment of where it went wrong and what its future policy directions will look like. 

Election manifestos shouldn't be reduced to such promotional pamphlets. It should explain how a party plans to reach their goals. We need the two national parties to tell us, unambiguously, where they stand on all issues confronting the country. Granted, that all promises made in a manifesto are unlikely to be kept. However, the documents will give us, the voters of India, a glimpse into the current thinking of the two national parties. 

The main point is that manifesto of political parties promises too many things at once - in an attempt to cover all bases but at the cost of credibility. It is true that political outcome is a key event for stock markets. But there are other factors like global liquidity and valuations which are even more influential and can determine the fate of the market irrespective of political turmoil. 

We believe that investing in equities based on a change in government is highly speculative. A change of the ruling party would only lift sentiments and stock prices in the short term but would do nothing to solve India's long term problems. For that we need real, tough reforms.