The Bharatiya Janata Party (BJP) in Madhya Pradesh announced on Saturday, 11 November, that it will provide free ration to all poor families, besides making available pulses, mustard oil, and sugar available at subsidised rates.
It also promised that it will provide free education till class 12 to students who come from economically backward families.
In a belated move, the saffron party released in Bhopal its Sankalp Patra, ie, its manifesto for the upcoming elections. And it's freebies galore.
Interestingly, this was followed by a spree of announcements by Chief Minister Shivraj Singh Chouhan.
This included increased wages and allowances for almost 30 lakh junior-level employees. He also announced to hike the pay of Anganwadi workers from Rs 10,000 to Rs 13,000, and double the honorarium of rozgar sahayaks (from Rs 9,000 to Rs 18,000), and triple the honorarium of leaders like the district panchayat president, vice president, district president, vice president, and the deputy sarpanch and panch.
He also did not disappoint the youth by promising e-scooters to meritorious students, a burden of Rs 135 crore, along with laptops for 78,000 students at a cost Rs 196 crore.
But where does all this money come from?
BJP and Congress Compete Over Freebies
Irrespective of the party that will form the government in December this year, it would be difficult for it to manage funds. Unmindful of the financial stress, political parties have a tendency to splurge taxpayers' money in the run-up to the elections.
With a budget size of Rs 3.14 lakh crore, Madhya Pradesh has a debt of over Rs 3.50 lakh crore. In the last 6 months, Shivraj Singh Chouhan's government has taken a loan of almost Rs 10,000 crore.
To compete with the Ladli Behena Yojana, a much-hyped cash-in-hand scheme for women started by Shivraj Singh Chouhan, the Congress has already announced its Nari Samman Yojana with Rs 1500 every month. After the Congress announcement, Chouhan increased the Ladli Behena scheme amount from Rs 1000 to Rs 1500. Additionally, he has promised to take it up to Rs 3000.
The Congress has also announced Rs 500 LPG cylinder to the poor, free 100 units of power, and up to 200 units of power at half the rate. After the success of the cow dung scheme, the Congress also announced that cow dung would be charged at Rs 2 per kg.
While the Congress had announced Rs 2600 MSP (minimum support price) for wheat and Rs 2700 MSP for paddy, the BJP increased the amounts to Rs 2700 and Rs 3100 respectively in its sankalp patra, terming it as Modi ki guarantee (Modi’s guarantee). This was announced by BJP national president JP Nadda.
Sources in the state's finance department told me, “We need to have a lot of financial discipline for the coming two years at least. The financial health of the state continues to deteriorate given the way that freebies are being announced.“
“After the GST came into existence, we only have two major sources of revenue, that is, excise duty and income generated from the petrol and diesel cess”, they claimed.
Extravagant Shows of Hindutva
Through its network of liquor shops in the state, the Madhya Pradesh government generates over Rs 12000 crore from the sales of liquor.
Similarly, the government is also generating a similar amount from the sales of the taxes levied on petrol and diesel. The VAT levied on petrol is more than Rs 21.50 a liter and over Rs 15 on every liter of diesel.
Before the assembly election campaign began in the state, Jagdish Dewda, finance minister of the cash-starved government, said that he was in no mood to bring down taxes on fuel.
A financially disastrous combo of dole-outs and extravagant shows of Hindutva is pushing the debt-ridden state government to the brink of bankruptcy.
Besides freebies like the Ladli Behena scheme costing almost Rs 1,210 crore per month to benefit about 12.5 million women beneficiaries, the state allocated Rs 358 crore to expand and establish four temples: Devilok in Salkanpur, Ramlok in Orchha, Ravidas Samark in Sagar, and Divya Vanvasi Lok in Chitrakoot.
The Ravidas temple in Sagar, the Bhumi pujan of which was performed by Prime Minister Modi in August this year, is being constructed at a cost of Rs 100 crore.
To compete with the 101-foot-tall Hanuman statue constructed by Kamal Nath in Chhindwara 14 years ago, Shivraj in August this year announced a Rs 350 crore renovation project of an old Hanuman temple in Chhindwara.
The state has already implemented a major part of the Rs 2400 crore project of a 108-foot tall statue of Adi Shankaracharya at Omakareshwar.
Named the ‘Statue of Oneness’, this project is dedicated to an eighth-century seer. Situated on the banks of river Narmada, Omakareshwar is a temple town that houses one of the 12 jyotirlingas dedicated to Lord Shiva.
'Majority of These Are Mere Announcements'
Is it possible to execute these projects along with the announcements made by CM Chouhan? The finance department sources told me that it is not.
“A majority of these are mere announcements”, they said, “as the respective departments will compile them and send them to us. We, in turn, will examine and put them before the cabinet of the next government for clearance.”
About 15 months ago, while referring to freebies, union finance minister Nirmala Sitharaman had said that political parties that come to power on pre-poll promises of freebies should pay for those through budgetary provisions.
She was correct.
When Shivraj announced the Ladli Behena scheme to win assembly elections, top government sources claimed there were no budgetary provisions and huge funds were withdrawn from several government departments, as a result of which several government works were adversely affected.
(The author is a senior journalist based in Madhya Pradesh. This is an opinion article and the views expressed above are the author’s own. The Quint neither endorses nor is responsible for them.)
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