Rs 40,000 crore a year: What Congress promises in Chhattisgarh may add up to

The cost of meeting the promises made by the ruling Congress, including loan waiver, is said to be a minimum of Rs 40,000 crore in the first year and Rs 30,000 crore per year after that, sources said. The yearly budget of Chhattisgarh is around Rs 1 lakh crore.

Asked about the burden of the Congress’s promised schemes on the state treasury, Chief Minister Bhupesh Baghel told The Indian Express in an interview last month, “We are well within the guidelines as per the total interest on loans goes. Our debt to GSDP ratio at 16% is also below (the benchmark) of 25%.”

About the cost of returning to the OPS, estimated to be around Rs 22,000 crore annually, Baghel said: “After 2070, there will be some burden. For 50 years, there will be no burden at all.”

The one-time farm loan waiver promised by the Congress will also come at a steep price. While in 2019, it had cost the state government around Rs 9,500 crore for 19 lakh-odd farmers, this is set to increase owing to the pro-farmer policies of the Congress which have seen the number of registered farmers go up from 15.77 lakh in 2017-2018 to almost 25 lakh now.

Questioned by the media earlier on this, Baghel had said, “If Rs 14.50 lakh crore of industrialists are waived off, then why can’t we waive off loans of farmers?”

Another 3.55 lakh landless farm labourers will get Rs 10,000 per year, costing the state Rs 355 crore per year.

Then, there are loan waivers for self-help groups of women, estimated to cost approximately Rs 250 crore, and the waivers for transport businessmen, of another Rs 726 crore.

During the campaign, senior Congress leader Rahul Gandhi said they will announce the loan waivers in the very first Cabinet meeting if voted to power. Rahul also said that as part of the Rajiv Gandhi Kisan Nyay Yojna, the state gave Rs 23,000 crore to farmers as input subsidy, by buying 15 quintals of paddy at Rs 2,500, including MSP, which increases every year. Now, the Congress has promised to buy 20 quintals of paddy at Rs 3,200 (including MSP).

In the present financial year, around Rs 8,700 crore were spent to buy 1.7 crore metric tonnes of paddy. Given the increased number of farmers and additional paddy procurement promise, a minimum of Rs 10,000 crore per year would be needed.

The monetary benefit of Rs 15,000 per year to women, assuming a future Congress government does not set conditions on it, will have to be given to 1.02 crore women. This adds up to Rs 15,385 crore per year.

The Rs 500 subsidy on gas cylinders can cost the government Rs 250 crore assuming the 50 lakh families covered buy just one gas cylinder every year.

The Congress has made other promises such as free electricity up to 200 units, which will cost the state exchequer a minimum Rs 3,000 crore per year. The free electricity to farmers costs another Rs 1,000 crore per year.

Then there are promises such as free bus service for all students, free education from “KG to PG (kindergarten to post-graduation)”, conversion of all schools to English medium, additional money for forest produce, and bonus for tendu leaves. About 12.94 lakh families collect tendu leaves, which means Rs 517 crore will be spent every year as bonus amount and Rs 776 crore will be spent on tendu collection.

The government has also announced free treatment up to Rs 10 lakh for the poor and up to Rs 5 lakh for Above Poverty Line families, free treatment for injuries in any accident, Mukhya Mantri Awas Yojana for 17.50 lakh people and subsidy for starting business.

Experts caution that the welfare schemes should be planned better and targeted towards the needy. Ravindra Brahme, professor at Pt. Ravishankar Shukla University, Raipur, said: “The state treasury must not be burdened by providing freebies to those who do not need it.”

An economic expert with the Chhattisgarh government on condition of anonymity said, “Since the state doesn’t have adequate revenue, it has to resort to unchecked borrowing for these promises, leading to a mounting debt burden. This in turn causes a vicious cycle, requiring more borrowings for debt servicing. It also leads to a slowdown of the economy as there is hardly anything left for capital expenditure to build assets.”

Congress communications head Sushil Anand Shukla said it was wrong to see the promises as just freebies, and that these were meant to make a strong Chhattisgarh. “The policies are needed as we have just come out of the pandemic, and when the country is suffering from rising prices and Central government taxes. Free electricity is more of a compensation to our people as the natural resources of the state allow us to sell electricity to other states. The free education is provided so that students can become assets for this country. Also, the money given to women empowers them to run their families, and to save money for their children’s studies.”

The BJP too has rolled out promises such as Rs 12,000 per year for married women, paddy price of Rs 3,100 for 21 quintals per acre in one time payment, and gas cylinders for Rs 500. Asked if these too would not hurt the state exchequer, BJP spokesperson Kedar Gupta said, “The monetary help to women was a stand first taken by the BJP. We want to lift the standard of life of women and make them self-reliant… Ours is Modi guarantee. Also, we never do corruption and, in 15 years (of the BJP government), we built infrastructure in less than Rs 30,000 crore of loans, while the Congress government spent over Rs 55,000 crore and did nothing. We work with planning and will never allow Chhattisgarh to get drowned in debts.”