The ‘freebie war’ in Madhya Pradesh is escalating before the year-end elections in the state, the Shivraj Singh Chouhan government increasing the monthly payouts to women and subsidising LPG cylinders. Meanwhile, Congress’ Kamal Nath has augmented his ‘five promises’ so far to ‘11 vachan’ (promises) to woo voters.
This is happening in a state whose fiscal deficit for 2023-24 is targeted at Rs 55,708 crore, at nearly 4% of the Gross State Domestic Product (GSDP), which is higher than the 3.5% limit as per the Fiscal Responsibility and Budget Management Act, 2003.
The state government had launched the ‘CM Ladli Behna Yojana’ in June under which Rs 1,250 crore is being paid monthly to women. The amount was increased to Rs 1,600 crore this month after CM Chouhan raised the monthly payout from Rs 1,000 to Rs 1,250.
If the scheme is hiked to Rs 3,000 a month eventually as announced by the CM, the total payout under the scheme could rise to Rs 3,800 crore a month or Rs 45,600 crore a year – nearing the annual fiscal deficit of the state.
Chouhan has also announced that the LPG cylinder will be provided to women at a subsidised cost of Rs 450 in the month of ‘Saavan’ and an “appropriate arrangement” will be made in the future. A non-subsidised cylinder costs Rs 1,100 and the state will be footing the rest of the cost.
Kamal Nath’s Counter
Not much is expected to improve on the state’s fiscal health count if Kamal Nath comes to power later this year who has made not five but 11 promises to fulfil. The main among them is Rs 1,500 monthly payout to women, that could mean a burden of Rs 1,875 crore a month on the state exchequer. The other big promise is to give a cylinder for Rs 500 a month, meaning the state will bear almost Rs 600 of the cost of the cylinder at current prices. He has also promised 100 units of free power plus next 100 units at 50% price.
To counter this, Chouhan also announced relaxations in power tariffs on Sunday and said older pending bills will be settled at a nominal cost. The other promises by Nath, which could have considerable fiscal implications, if he comes to power, include a farm loan waiver, the Old Pension Scheme (OPS) for government employees and free power to some farmers. This could take the total fiscal burden on the exchequer far beyond what is under the present the government. The other promises made by Nath include 27% reservation for Other Backward Castes, a caste census, and 12-hour assured electricity for irrigation.
The freebie war is only expected to further escalate in Madhya Pradesh in the coming days till the elections with stakes being upped.
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