(This article was originally published by The Economic Times on 11/02/2019.)
NEW DELHI: Union budget 2019 set the tone and the states have followed suit with ‘political’ and ‘propeople’ budgets ahead of the Lok Sabha elections.
Across states, the focus is on three segments—farmers, unemployed youth and women.
Almost every state has avoided imposing fresh taxes even while facing a deficit. In fact, purse strings have been opened by the Opposition-ruled states to outdo the Union government on doles and by the BJP-ruled states to retain the goodwill of voters.
The Naveen Patnaik-ruled state announced a Rs 1.326-lakh-cr pro-people budget with Rs 4,461 crore set aside for its flagship cash transfer scheme for farmers, KALIA, and Rs 800 crore for interest subvention to farmers. That apart, the state earmarked big funds for welfare schemes, including Rs 1,028 cr for rice at Rs 1 per kg, Rs 2,100 crore for pension to 48 lakh people, Rs 305 crore for cash handout to pregnant women, Rs 400 crore for the ‘Ama Gaon, Ama Bikas’ government outreach programme and Rs 2,935 crore for rural water supply scheme – BASUDHA.
Kerala's Rs 1.42-lakh-cr budget makes big allocations to create a ‘Nava Kerala’ following the 2018 floods. It also set aside Rs 2,500 cr for agriculture, Rs 7,533 cr for pension welfare schemes, ?114 cr for welfare of backward communities. It has also earmarked Rs 250 cr for devising an employment guarantee scheme and women-centric schemes.
Mamata Banerjee-ruled West Bengal’s budget has increased allocation for agriculture by 120% to Rs 6,086 cr. The state proposes full exemption from payment of education cess and rural employment cess for the next two financial years to the tea gardens.
The state has also promised a Rs 1,000 crore scheme to hand out Rs 100,000 a year to 50,000 unemployed youth, hiked payouts for over 2 lakh women workers at Anganwadis and ASHA, and for one lakh contractual group D and C staff.
Former NDA ally Chandrababu Naidu has matched the Centre's budgetary largesse in his Rs 2.26-lakh-crore budget. He has set aside Rs 5,000 cr for the Annadaata Sukhibhava scheme for input grants to farmers, doubled allocation to the market intervention fund for farmers, and announced a Rs 4,000 crore kitty for a one-time grant for women members of self-help groups. Naidu’s budget also raised unemployment allowance for over 4 lakh youngsters.
The Congress-JDS alliance has allocated a quarter of the state budget—over Rs 46,000 cr— for agriculture, loan waivers and allied activities. Special allocations have been made for incentivising cultivation of minor millets, paddy, grapes and pomegranates. Besides, there is a scheme to allow Rs 6,000 monthly pension to pregnant women and milk for children in school.
With a Rs 10,881-cr deficit, the Congress-ruled Chhattisgarh has announced farm-loan waiver, set aside Rs 21,597 cr for the agriculture sector, halved electricity bills for domestic consumers and increased outlay for MG NREGA.
Staring at a fiscal deficit of over Rs 44,000 cr looming large, Tamil Nadu has chosen a more prudent approach than most other states. It has still set aside over Rs 3,900 cr for a social security pension, Rs 6,000 cr for food subsidy and specific schemes to improve skills of unemployed graduates besides a boost to the MSME sector.
BJP-ruled States on the Same Path to Populism
Yogi Adityanath’s government announced a series of electionoriented moves in its Rs 4.79-lakhcr budget. Apart from a 14% hike in allocation for agriculture, the Yogi government has also sought to address the growing cattle problem by allocating Rs 600 crore for cow shelters.
The state has announced a Rs 1,200-cr "Kanya Sumangala Yojana" to raise health and educational standard of girls.
The state has widened the pension scheme for the destitute and also brought saints and sadhus under its ambit.
Aiming to rev up infrastructure building before the model code of conduct kicks in early next month, the Yogi government has announced over Rs 5,000 cr for construction of expressways, airstrips and airports at Jewar and Ayodhya.
The Sarbananda Sonowal government presented a Rs 1,193.04-crore deficit budget this week but that hasn't stopped it from announcing a range of schemes that many would consider populist. The state proposes to give 10 gms gold to brides, rice at Rs 1 per kg for 53 lakh families, free rice and 2 kg sugar to 4 lakh families in tea gardens. He also announced a Rs 10,000 monthly stipend for every college goer from tea gardens.
Each widow below 45 years of age will get a one-time grant of Rs 25,000. That apart, a one-time cash incentive of Rs 50,000 each will be given to over 2,000 sport and art personalities.
The hill state has earmarked Rs 7,100 crore for rural economy and farmers. The schemes for farmers include those for control of floods, mushroom cultivation, indigenous cow breeding, besides the state has reduced power tariff from 75 paise per unit to 50 paise per unit for irrigation. Thestate has also announced a social security pension.
With state elections also due this year, Raghubar Das’ budget announced a 24% hike in allocation for agriculture. On offer is the Mukhya Mantri Krishi Ashirwad Yozana under which farmers will get Rs 5,000 per acre every year and Rs 150 as bonus over the minimum support price. Over 25% funds of the state have also been allocated for development of SC/STs.
Chief minister Manohar Parrikar has announced a Rs 19,548 -cr budget with a revenue surplus of Rs 450 crore with focus on agriculture, employment, infrastructure and education.