Welfare Promises vs. Fiscal Reality: An Analysis of Congress' 6 Guarantees in Telangana

Cost of all 6 Congress' promises as per the criteria mentioned above would be ₹3 lakh crore over a period of 5 years.

Mahalakshmi scheme

The Mahalakshmi Scheme in Telangana, designed to empower women voters through enhanced rights and amenities, carries significant financial implications. The scheme entails a monthly contribution of 2500, Gas cylinder at a cost of ₹500 per month, and free travel in Telangana State Road Transport Corporation (TSRTC) buses. These promises, while impactful at the grassroots level, must be considered in light of the state's challenging fiscal situation. Telangana's public debt has surged to ₹3.14 lakh crore, exceeding the intended limit of 25% of the Gross State Domestic Product (GSDP). The fiscal year 2021-22 reveals a revenue deficit of ₹9,335 crore and a fiscal deficit of ₹46,639 crore, signaling financial strain.

The commitment to offer free travel for women in TSRTC buses, though beneficial, poses a substantial financial burden. Calculating the annual cost based on RTC bus revenue, the daily commutation expense alone is estimated to be not less than ₹1,760 crores per year. Additionally, the promise of a monthly stipend of Rs 2,500 for women entails an annual burden of ₹4,348 crores on the State's exchequer annually. The burden due to the LPG subsidy is calculated to result in a loss of ₹2,820 crores per year.

While the Mahalakshmi Scheme aligns with empowering women and improving their well-being, the cumulative financial impact necessitates careful consideration. Striking a balance between these promises and the state's fiscal capacity is imperative to ensure the sustainability and long-term effectiveness of the initiative, without exacerbating existing financial challenges. The beneficiary list of women also comes without other eligibility criteria which will be decided post elections.

According to Telangana State Statistical Abstract - 2021, there are 90,49,480 BPL (Below Poverty Line) card holders across Telangana and 82 lakh white ration cardholders according to Telangana Socio Economic Outlook - 2021. A clear demarcation of classes and identification of beneficiaries according to needs of the population would be important before formulating a policy during the time of fiscal debt. While examining the aspect of free travel could be positively related to employment participation of woman and rise in income levels, the current state of Telangana State Road Transport Corporation is of a huge concern with the corporation witnessing a decline in revenue by more than 10 percent in comparison to previous years.

Rythu Bharosa

The Rythu Bharosa initiative, aimed at providing financial support to farmers and agricultural laborers, encompasses several key provisions. One noteworthy aspect is the assurance of ₹15,000 per acre annually for farmers and tenant farmers, alongside an additional ₹500 per quintal as a bonus for paddy crops. This is estimated to be close to ₹3,300 crores annually. In addition, the scheme allocates ₹12,000 per year for agricultural labourers as a crucial component for their well-being which is calculated to be about ₹7,188 crores annually. The Rythu Bandhu Scheme currently benefits around 58 lakh beneficiaries.

Gruha Lakshmi

While the 200 units of free electricity move seems appreciable, the current concerns of discoms being in loss may want the congress to analyse the position before implementing policy solutions. The burden faced by the discoms are as follows:

As of 2022, Telangana has about 12,336,341 domestic connections. Currently, the per unit tariff rate varies between ₹1.95 to ₹10 based on the slab of power consumption. Assuming, modestly, that an average household consumes between 150 units of electricity on a monthly basis with an average per unit cost of ₹5, and, further assuming that about 50% of the total domestic households would be made the beneficiaries under the scheme, then, the monthly cost would be ₹462 crores leading up to ₹5,544 crores annually.

Indiramma Indlu (Indira Housing Scheme)

Currently, 27 Lakh poor households do not own a house. The congress guarantees a 250 sq. yards plot for all Telangana statehood activists under the guarantees of Indramma Indlu. In addition, it promises a plot along-with ₹5 lakh cash support for the construction of house to the people who do not own a house. Assuming that half of 27 lakh eligible beneficiaries are provided with the cash support, the total would be ₹67,500 crores.

Yuva Vikasam

The guarantees under Yuha Vikasam calls for a holistic approach towards student development. This initiative is designed specifically for the youth residing in the state. It encompasses a Vidya Bharosa card valued at ₹5 lakh, intended to benefit students. Additionally, the promise involves the establishment of Telangana International Schools in every mandal.

Cheyutha

Under the Cheyutha component of the scheme, senior citizens are entitled to receive a monthly pension of ₹4,000 per month. Furthermore, participants can avail themselves of ₹10 lakh coverage through the Rajiv Arogyasri health insurance. Currently, the BRS-led government, under its AASARA scheme, is providing pension of ₹3,016 per month amounting to a total of ₹4,700 crore benefitting 37,65,304 individuals. In July 2023, KCR announced a ₹1,000 increment on the AASARA scheme for differently-abled beneficiaries with the present total being ₹4,016 per month. In 2022-23, Telangana Govt. spent about ₹9,000 crores on AASARA pensions. A monthly pension of ₹4,016 would be an extension of budgetary constraints from the current allocations. If implemented, the cost would be about ₹18,073 crores annually. It should be noted that the Congress also assured that new beneficiaries would be added to the Cheyutha scheme in addition to the existing pensioners. All the 6 Guarantees as per the aforementioned criteria amount to about ₹3 lakh crore over a period of 5 years and about ₹60,000 crores annually.

Clear eligibility criteria and a post-election plan for financial viability are essential. It is unfortunate that political parties do not undertake due diligence while announcing policies and schemes in their election manifestos. The sole objective is to woo voters at the time of election in order to secure a victory either by hook or crook. In mature democracies and political systems, striking a balance between empowering citizens and addressing the challenging economic scenario is essential and takes the centre-space. It is to be seen how the Congress, if it forms the government, implements these guarantees.

This article has been authored by M. Adithya, a Public Policy Research Intern at CRFHGR and is currently pursuing her final year Master's in Public Policy from NLSIU Bengaluru.