Congress Rs. 2.56-lakh cr guarantees to push Telangana into financial crisis. Or, is there a star mark?

HYDERABAD: Promising the moon is not a problem. But, so far, no one has the wherewithal to bring it down.

The six guarantees that the Congress party made on Sunday too lack the basic premise in economics i.e. the means to an end.

There are many questions and doubts that remain unanswered after the pompous announcements of Sunday.

The ballpark calculations done by some enthusiastic analysts based on the guarantees that were announced by Rahul Gandhi, reveal that the grand old party (GOP) failed to take into consideration, the scope of the exchequer of the State. Which in the words of Chief Minister K Chandrashekar Rao, is a continuous process of incoming and outgoing funds that don’t stay static at any time.

Hence, the Government has to create enough revenue-generating sources that could be spent on social welfare whose benefits may not be tangible immediately but have a long gestation period to fructify into quantifiable economic results. For instance, the annual expenditure on implementing the six promises made by the Congress will be close to Rs 2.56 lakh crore, whereas the annual budget of Telangana is Rs 2.70 lakh crore.

The questions wracking the brains of analysts are not essentially not unfounded. The Congress has a responsibility to clarify the doubts before doing anything.

What’s missing in the Congress party’s dole is the critical ‘fine print’.

How do they segregate beneficiaries?

Do they give all women in the State Rs.2,500?

Does it include corporate honchos, politicians, legislators, ministers, lawyers, judges, doctors, techies, journalists, chartered accountants, et al ?

Where is the cutoff mark? What if a senior executive of a corporate claims to be a farm labourer? Does he get the Rs.12,000 a year?

Who certifies the Identity of a person as a farm labourer or tenant farmer?

What does the sweeping announcement of Vidya Bharosa Card? How many would get the benefits ?

Do all households get a domestic gas cylinder for just Rs.500? Does it apply to double cylinder connections? What if it is a joint family with more than one gas connection?

Does the Congress, at the end of the day, throw its hands up into the air and say you should read the “fine print” and that these schemes Sare not applicable to all? And, would say only the eligible would get them and, of course, conditions apply (with a sarcastic asterisk before that)?

Let's decipher the Rs 2.56 lakh crore bill for the extravaganza that the so-called economists sitting at the Akbar Road, unwittingly declared at the Vijayabheri meeting.

Annual Expenditure

Pensions- Rs 39,110 Cr

Indiramma Indlu -Rs 55,200 Cr

SC/ST welfare schemes-Rs 60,900 Cr

Farmers- Rs 69,500 Cr

Mahalakshmi- 16,700 Cr

Village Panchayats - Rs 1,250 Cr

2 lakh jobs -Rs 6,000 Cr

Gruha Jyothi-Rs 7,200 Cr

The total of all these sub-heads comes to around Rs 2.56 lakh crore.

Rahul Gandhi promised the voters that the Congress Government would start implementing these schemes on the same day it would take oath if elected to power in Telangana.

The Congress has already burnt its hands with the ‘guarantee’ assurance in the neighbouring State of Karnataka, where the implementation of the schemes that lacked financial support emptied the coffers in just three months flat. The honeymoon ended as fast as it started forcing the Government to look for ways to tweak the guarantees in some manner to avoid public anger.

The Congress in a rush to win back power, declared Rs 4,000 pension especially for Telangana, while its Governments in Rajasthan, Chhattisgarh, Karnataka and Himachal Pradesh offer a meagre pension of Rs 1,000. Power holidays are declared as the demand-supply situation of power generation went awry due to mismanagement. Industrialists particularly small-scale and medium-scale industries who were hard hit by the erratic power supply hit the roads reminiscent of the erstwhile Congress Raj.

The fact is that Congress has not yet started implementing all the five guarantees that it made in those States. Griha Jyothi, free power, Yuva Nidhi, are not yet launched. The big question is how can Congress implement similar schemes in Telangana.

The Telangana Model

During the past nine years, Telangana undertook massive infrastructure projects particularly in irrigation, drinking water, and power generation, all having high returns per every single rupee spent. It proved that welfare programmes can be implemented only by choosing ways of revenue generation in the first place. To run a successful Government one must implement welfare schemes and revenue generation in tandem, monitoring the schemes and fine-tuning any lacunae. Any mismatch in the expenditure and revenue accounts of the State exchequer can empty the coffers.

Analysts point out that welfare schemes must strengthen the Government and also the government-run organisations or the public sector. It happens when the beneficiaries plow back the benefits into the State's economy in a tangible form. But if the schemes are designed only to benefit the people for the short-term gain then the damage will be far-reaching, like the collapse of Pakistan or Sri Lanka’s economies that failed to build revenue-generating sectors to match the welfare schemes.

The logic that experts in public finance always put forward is that the only beneficiary of such unmindful one-way delivery of welfare schemes will only strengthen the middlemen, invariably creating a link between the corporates and the public servants. The tax payers’ monies will then find their way to the pockets of the corporates, in a quid pro quo manner.

Hence, it is prudent that people think twice before accepting an offer like the one Congress did on Sunday afternoon. These promises have no financial backing and can land you and the State in trouble from day one.