Sops: Where Is The Money?

Source: The Hitavada      Date: 21 Nov 2018 13:06:48

By L S Herdenia,

Congress in its ‘Vachan Patra’ has promised the moon to the voters. If the Congress is voted to power and if it implements its manifesto substantially-even if not wholly- it would turn the State into a veritable utopia.


IF ALL the promises made by Congress and BJP in their manifestos for the upcoming MP Assembly polls were to be fulfilled the State Government is destined to become bankrupt.
Congress in its ‘Vachan Patra’ has promised the moon to the voters. If the Congress is voted to power and if it implements its manifesto substantially-even if not wholly- it would turn the State into a veritable utopia.

Both the parties have promised numerous freebies but have not cared to indicate the sources from where they will raise additional funds to finance their promises.
The important highlights of the Congress manifesto are:
Farm loans would be waived, dairy farmers would get Rs. 5 per litre as bonus, small farmers will get Rs. 51,000 for the marriage of their daughters, a Gaushala will be created in every village Panchayat allowing ‘Gau Matas’ to find peaceful and untroubled earthly exit, and further free education would be offered to female students from primary to college levels.

Additionally, all 60-plus small farmers, traders, artistes, artisans, writers and workers would receive Rs. 1,000 per month as pension, as will the mentally and physically disabled. Every individual in these categories will receive a 400 square feet plot of land free of cost and Rs. 2.50 lakh for building a house on it.

Further, all centenarians will receive Rs. 1 lakh as ‘samman nidhi’; all consumers will stand to garner 100 units of power every month for Rs. 100. The 112-page document makes 973 promises with sops for everyone – from students to farmers, from the elderly to the women, from the unemployed to white-collar workers.

The million dollar question is: What is the source to finance these vast and near-unreachable promises?
A back-of-the-envelope calculation shows the Government would need at least Rs. one lakh crore to fulfil these promises. Juxtapose it against the fact that in the State’s annual budget for 2018-19, the total expenditure was pegged at 1.86 lakh crore, against a total revenue of 1.61 lakh crore – and one can imagine the sheer magnitude of the task at hand.

Of the total expenditure, the Government will be spending Rs. 1.55 lakh crore on salaries, pensions, and maintenance of existing infrastructure. The long and short of this argument is pretty simple– the Government has only about Rs. 25,000 crore for other expenditures.

The biggest and the most expensive promise in the Vachan Patra is farm loan waiver. Congress says that if voted to power, it will waive all “current and overdue” loans up to Rs. 2 lakh for all farmers. According to estimates, around 67 lakh farmers in the State cumulatively owe Rs. 70,000 crore to nationalised and co-operative banks. Of these, peasant leaders say, at least Rs. 50,000 crore will belong to the less-than-Rs. 2 lakh slot.

Thus, the Government will need Rs. 50,000 crore – one-third of its annual revenue – for the farm loan waiver alone. Some other proposed projects that involve a high cost, high-delivery metrics are:

There are 23,006 village Panchayats in the State. If the cost of each ‘Gaushala’ is taken to be at a minimum of Rs. 3 lakh, the total expenses on this account will be pegged at Rs. 700 crore. The Government will also extend aid for buying essential material such as fodder. According to a report in 2017 by the Ministry for Food Processing of the Government of India, Madhya Pradesh was the third biggest milk producer in the country.

The State’s total milk production stood at 13.5 million metric tonnes, translating into 1,304 crore litres. And the bonus would cost a whopping Rs. 6,520 crore annually. Of course, not all of it will be sold to the milk co-operatives, however, a substantial portion would be.
In a recent survey conducted by the State Government, 1.87 crore persons had registered themselves as workers in the unorganised sector. According to the Union Ministry of Statistics, 60-plus persons form 8.6 per cent of India’s population. Thus, it can be presumed around 16 lakh unorganised workers in the State must be 60-plus. And paying them Rs. 1,000 per month as pension will mean an annual outgo of Rs. 2,000 crore.

There are around 1.26 crore BPL households in the State. Assuming that each family consumes only three cylinders a year, total expenses will amount to approximately Rs 400 crore. Interestingly, the ‘Vachan Patra’ does not have a word on how the Government will gather the requisite funds or its plans on revenue enhancement. Clearly, economics is a pale second to vote bank politics.

Just 10 days ahead of polling day the ruling BJP released its manifesto called ‘Drishti Patra’, basically wooing the youth and farmers. In a first, the party released a separate manifesto for women – considered the BJP’s dedicated voters by many – in an attempt to give them special focus.
In the manifesto of 2013, the party had promised to give bicycles to school-going girls and this time it has graduated to scooty (two -wheeler) to girl students who score over 75% marks in Class XII examination. But the document has not clarified whether these students will include those who study in CBSE affiliated schools.