MP Polls: Congress, BJP Promise Moon, But Where is the Funding?

Bhopal: The Congress and the Bharatiya Janata Party (BJP) have released their manifestos ahead of Madhya Pradesh assembly polls, and have promised the moon to the voters, but neither of the manifestos have even a line on the revenue generation model.

No doubt, implementation of even half of those promises by both the parties would turn the state into a veritable heaven on earth, but the calculation shows it would need more than Rs 1.4 lakh crore to do so.

Now, the million dollar question here is: where will it get the money from? When the state already has debt of Rs 1.11 lakh crore, how the elected government will fulfill these tall promises? Clearly, politics got the better of economics!  

Newsclick conducted an analysis on the financial feasibility of Congress and BJP’s manifesto.

Congress manifesto

Congress manifesto is of 112 pages with 973 promises titled ‘Vachan Patra’, which promises farm loans waived, Rs 5 per litre as bonus to dairy farmers, bonus on major 17 crops, Rs 51,000 for marriage of the daughters of the small farmers. Other promises include a gaushala (cow shed) in every panchayat for old and abandoned cows, free education for girls from primary schools to Ph D, Rs 1000 monthly pension plus 450-sqft plot of land and Rs 2.5 lakh to build a house on it for all 60-plus small farmers, traders, artists, writers and workers, and many such sops.

Farmers: The most expensive promise is that of farm loan waiver of all loans below Rs 2 lakh of all farmers, if voted to power. According to Congress party press release, the farm loan scheme will benefit around 81 lakh farmers which would cost Rs 94,000 crore. It means the government would need more than half of its annual revenue to fulfill its promise.

Gaushala in all panchayats: The expense of the building one cow shed at the cost of roughly Rs 3 lakh each in 23,006 panchayats will cost around Rs 700 crore.

Rs 5 per liter bonus: Union food processing ministry report of 2017 says MP is India’s third biggest milk producer with total milk production of 13.5 trillion metric tons or 1304 crore litre. Even if a substantial part of this milk is sold to Milk Corporation, the annual bonus will be around Rs 6,520 crore.

Rs 1000 monthly pension: In a recent MP government survey, 1.87 crore people put themselves in the unorganised sector. Again, central government data pegs 8.6 per cent India’s population to be 60-plus. In that case, around 16 lakh MP’s unorganised workers too, should be seniors. Paying them Rs 1,000 every month will translate to around Rs 2,000 crore annual expenditure.

BJP

The BJP released 80-page manifesto titled ‘Samridh Madhya Pradesh Drishti Patra’ including a separate manifesto for women on November 17, 2018.

In the manifesto, the BJP has promised farm crop loan of Rs 40,000 crore every year, bonus to 17 lakh small farmers of Rs 7,000 every year, Rs 500 crore special funds for farmers, Rs 2,000 for farmers’ crop price stabilisation, Rs 100 crore to Madhya Pradesh Agriculture startup, and opening of 100 new veterinary hospitals across the state.

Besides, it has promised Rs 1,000 crore to promote young entrepreneurs every year, Rs 1,000 pension to widows every month, smartphones to Asha workers, non-geared scooters to girl students who will secure 75 per cent in intermediate, Gaushala at every village, Rs 4,000 crore to build roads under Chief Minister Village Roads Scheme, Rs 2,500 crore to develop infrastructure in small cities, Rs 7,000 crore to provide clean water to urban areas, and many more sops.

Farmers

Farming sector has lion’s share in the BJP’s manifesto. The party has promised to give Rs 7,000 bonus to 17 lakh farmers which would cost around Rs 2,000 crore. Besides, the BJP has promised to spend Rs 60,600 crore on farm sector including crop loan to crop stabilisation, special fund for farmers, and many more. It means, if BJP returns to power, it has planned to spend one fourth of its fund on the farming sector.

In the previous budget, the BJP government had presented the budget of whopping Rs 2, 04,642 crore, and approved farm budget of Rs 37,000 crore, but this time, the party is planning to give it a major share, as it has mentioned in its manifesto.

Cowshed and veterinary hospital

The party has promised to open 100 veterinary hospitals, and gaushalas at every village of the state. The expense of opening veterinary hospital would roughly cost Rs 2 crore each and Rs 3 lakh for building a cow shed. The opening of veterinary hospital would cost Rs 200 crore, and cow shed for 51,527 villages would cost around Rs 1,800 crore.   

Smartphone to Asha workers and scooty to girl students

According to the state government data, there are 65,000 Asha workers, and a smartphone to every Asha worker would roughly cost Rs 6,000, which means the government would spent Rs 3,000 crore to distribute smartphones to the Asha workers.

If we talk about giving scooty to girl students who will obtain more than 75 per cent marks in intermediate, there were more than 30,000 girl students, according to the Madhya Pradesh Board of Secondary Examination, who had secured 75 plus marks in the intermediate. And a scooty costs around Rs 60,000. It means the government will distribute scooties worth Rs 2,500 crore.

Rs 1000 monthly pension: According to the state government data, there are 16 lakh widows in the state, and paying Rs 1000 every month will translate to around Rs 2000 crore annually.

Others

Besides, the saffron party has promised to spend Rs 21,695 crore on drinking water for urban areas, maintenance of roads, metro at Indore, Bhopal and develop infrastructure in the small cities.

The fiscal mismatch

Juxtapose the estimates of Rs 1.4 lakh crore that the Congress and the BJP government would need to fulfil its promises against the reality of the state’s annual budget for 2018-19. The total annual expenditure was pegged at Rs 2.4 lakh crore. Did the penny drop on the manifesto’s fiscal infeasibility?

The state government had a debt of Rs 1,87,637 crore as on March 31, 2018. So the average debt of every citizen of the state is Rs 23,454. And, days before the announcement of assembly election the state cabinet has cleared a bill to take loan of Rs 2,000 crore from the market.   

So, the concluding question is: The state which has been in deep financial crisis, and has a debt of Rs 1.13 lakh crore (including recently taken loan), how the winning party (whether BJP or Congress) will manage to fulfill the long list of its promises? If they manage to do so somehow, no doubt, the government would go bankrupt.