Of the major poll-bound States this calendar year — Rajasthan, Telangana, Karnataka, Madhya Pradesh and Chhattisgarh — the first three have announced their budgets for FY24. The last two will do so within the next few days. A remarkable feature of the budgets of Telangana and Karnataka, perhaps less so Rajasthan, is their high freebie quotient — which shows that the habit of giveaways cuts across party lines. Competitive populism is the order of the day, where clientelism (the hallmark of a mai baap sarkar dispensing goodies to favoured constituencies) displaces genuine welfarism — the creation of long-term social assets.

This comes on the back of the high committed expenditures towards salaries, pensions and interest costs. For instance, according to PRS’ analysis of the Rajasthan budget for FY24, committed expenditure will account for 56 per cent, which will worsen with the State’s shift to the old pension scheme, which, in a way, is a freebie. The promise of free electricity for the first 100 units has been thrown in. Karnataka and Telangana have outdone each other. Karnataka has announced free bus passes and cash transfers of ₹500 to select women groups. Telangana has raised allocations for Kalyan Lakshmi and Shaadi Mubarak — schemes providing financial assistance for marriages. The BJP may have flagged a debate on the “revdi” culture but that seems passe now. The ‘Raitha Shakthi Yojna’ to give diesel subsidy, which was announced in the previous year’s budget in Karnataka, has been additionally allocated ₹400 crore. This can encourage wrong cropping patterns. Over the next two years, Karnataka will spend ₹1,000 crore on development of temples and mutts.

Clearly, the political class has little use for the crucial distinction between welfarism and populism. To be sure, the RBI report on State finances does point to an improvement in fiscal parameters of States since 2021-22, with the ratio of revenue expenditure to capital outlay expected to decline from about 6.1 in 2021-22 to 5.2 in 2022-23. However, allocations to health and education are disappointing. For all States, the share of education in total budgetary outlays has fallen from 16 per cent in 2014-15 to 13.6 per cent in 2022-23 (BE). The share of health in budgetary outlays may have improved from 4.8 per cent to 5.7 per cent, but this is way below the magnitude of the crisis in our health infrastructure. The share of education in Telangana’s budget has declined from 11.2 per cent in 2014-15 to 6.2 per cent in 2022-23. For Karnataka, it has fallen from 15 per cent to 12 per cent, while Rajasthan has registered an increase from 16.7 per cent to 16.9 per cent over this period. The dismal learning outcomes reported by ASER surveys point to a need to reverse this decline in spending. To spend money on free bus passes and marriages when there are other priorities points to both political and fiscal cynicism.

comment COMMENT NOW