In the last five years, the Chhattisgarh government rolled out a slew of welfare measures-from farm loan waivers to health insurance to unemployment allowance and numerous developmental projects. As the State gears up for a high-octane assembly election on November 7 and 17, businessline analyses Bhupesh Baghel-led government’s performance.
The economy has been fairly well managed with fiscal deficit and borrowings under control. But the numbers on GDP growth and own tax revenue collections for the current fiscal year are too optimistic and could be hiding hidden stress, caused by political giveaways. There has been improvement in the last five years in social parameters such as people living in pucca houses and access to tap water. But the State is still below par on many health and education parameters. According to experts, the large tribal population has also not seen a material change in this period.
Rosy growth and revenue projections
The contribution of the services sector to Chattisgarh’s economy is relatively low compared with States such as Maharashtra or Karnataka, at 36 per cent. With agriculture and manufacturing dominating with 32 per cent share, the State has typically clocked a more sedate nominal growth, under 10 per cent in the pre-Covid period. The recovery from the impact of Covid, along with high inflation may have helped take the growth to 14 per cent in FY22 and FY23.
The growth projection for FY24 however looks optimistic at 11.2 per cent, given the lower inflation and slowing manufacturing and services growth this fiscal year. Moreover, the nominal growth projected by the centre is just 10.5 per cent. The higher growth projection could be masking the actual deficit.
The state’s tax revenue growth also looks too good to believe for FY23 and FY24 at 21.1 per cent and 15.9 per cent respectively. State GST which accounts for 37 per cent of the State’s tax revenue is estimated to grow 19 per cent this fiscal year, which is well beyond the 11 per cent growth in overall GST collections seen so far in 2023-24.
The State is also expected to collect 23 per cent more by way of taxes and duties on electricity this year, which will put too much pressure on consumers, besides being inflationary.
Improvement in capex
Of, the net expenditure of ₹1,21,495 crore budgeted for 2023-24, 84 per cent is allocated to revenue expenditure amounting to ₹1,02,501 crore. According to PRS the state has a large portion of committed expenditure, “This comprises spending on salaries (28 per cent of revenue receipts), pension (7 per cent) and interest payments (7 per cent).
The government of Chhattisgarh has however been steadily increasing its capital expenditure since 2019-20. In FY20, the government reduced its capex by 3.78 per cent, to compensate for the farm loan waivers. But in FY23, capex saw a huge increase of 62 per cent. In FY24, the government has budgeted a capex outlay of ₹18,660 crore which is a 9.3 per cent increase from a high base.
Fisc largely under control
While the fiscal deficit ballooned in the Covid period, it was brought under the FRBM limit by FY23. The fiscal deficit for 2022-23 is estimated to be 3.2 per cent of GDP and 3 per cent in 2023-24.
But these numbers are predicated on optimistic nominal growth and strong own tax revenue collections. Given the expenditure planned on pre-poll giveaways, the fiscal deficit for FY24 is likely to expand.
The government has however kept its borrowing under check with the projected borrowing for 2023-24, of ₹19,042 crore, lower than the debt level in FY20.
Scope for better grades
According to the UDISE+ report, the gross enrolment ratio at the elementary school level (total enrolment in classes 1 to 8 as a percentage of the population in the corresponding age group) has reduced slightly from 96.3 in 2018-19 to 95.9 in 2021-22. This could be due to the disruption caused by the pandemic. The GER for the country is 100.1.
The positive is that the dropout rate in primary classes (proportion of students enrolled in classes 1-5 at a given school year who are no longer enrolled in the following school year) has reduced from 3.4 per cent in 2018-19 to 0.4 per cent in 2021-22. These could be due to the Swami Atmanand English Medium Schools programme launched in November 2020 and the Mahatari Dular Yojana in May 2021. These schemes have brought about improvement in the quality of education but there are issues in implementation.
Housing and other basics
As per the NFHS data, the percentage of people living in pucca houses has improved from 36 per cent in 2015-16 to 43 per cent in 2019-21. However, this is relatively lesser than India’s average of 60 per cent.
Another basic requirement is access to tap water. According to the data from the Jal Jeevan Mission website, access to tap water has increased from 6.40 per cent in 2019 to 66.04 per cent in 2023. On this parameter too, the State is below India’s average at 70.15.
Safe birth and child health
In terms of institutional deliveries, Chhattisgarh has kept up with India’s average. 86 per cent of the births happened in a health facility in 2019-21 as compared with 89 per cent in all over India.
The under-five mortality rate in Chhattisgarh has reduced significantly from 64 (per 1,000 live births) in 2015-16 to 50 in 2021-22. But this is higher than India’s U5MR of 41.9.
Stunting in children under 5 years of age in Chhattisgarh is at 35 per cent, slightly less than India’s average of 36 per cent.
Nishant John, a health worker in Bastar district in Chhattisgarh, said that the facilities in the government hospitals in the district should improve. “Jagdalpur, the district headquarters, has only private hospitals. There are some Community Health Centres (CHC) but for any major treatment, one has to go to Raipur or Visakhapatnam,” said Nishant. He also pointed out the staff shortage in the CHCs.
Lack of wholesome policy
Neeraj Mishra, a political commentator based in Raipur said that the Baghel government had good intentions but half-heartedly executed the policies. “This government has consistently given money to the farmers and have supported them in procurement but have not done enough in terms of building the infrastructure to store grains and keep up with the increased production,” said Mishra.
Mishra pointed out that the same is the case in the health sector. “They are giving insurance to BPL families but are not building more government hospitals. There is a flood of private hospitals in the State. This has increased the costs for the common man. The government has good intentions but there is a lack of wholesome policy,” he said.
Chhattisgarh has a significant population of tribal people but there is a lack of representation among the community. “Both the Congress and BJP are trying to suppress them. Unless tribal leaders come to the fore, their issues won’t be addressed,” said Mishra.
Mishra believes that the State is going to witness a tight contest between the Congress and the BJP. “Congress is going to get a majority but the gap between the two parties is going to be negligible. Chhattisgarh has a history of low-margin elections. 2018 was an aberration. This time, it will come back to a low-margin election,” added Mishra.