शनिवार, 15 फ़रवरी 2020

Managing State Finance AAP Style!

Nothing succeeds like success, so goes the old saying. The unprecedented victory of Aam Aadmi Party (AAP) at the hustings in Delhi assembly elections is now talk of the country. Not only Aam Aadmi (common man), even political parties including saffron BJP is being swayed away by Arvind Kejriwal's model of governance.

So much so that the Narendra Modi Gujarat model of governance (what was it, I could never understand. It was more of rhetoric ) has been almost forgotten. And the Kejriwal's model of governance is now in sharp focus. There is nothing new in this model. It mainly focuses on people's burning problems and seek to solve them on priority. As such, free electricity (up to some units), regular clean potable water supply,fast delivery of quality health services and education to all have been Kejriwal's simple way of governance. And now most of the state governments are vying to catch up with this populist governance.

Regular supply of power and clean potable water are the basic amenities, a popular government is expected to ensure to its people. And so are quality education, health and transport services. And if regular power is free,it becomes a big catch. It is a most unfortunate state of affairs that no state govt in India in last more than seven decades could ensure the satisfactory delivery of basic amenities to the people. BJP and Congress both failed to read writings on the wall. Instead, both parties mocked Kejriwal and his govt performance and called delivery of services as hoax. BJP's arrogant attitude and jibes like " Aantki", "naxalite" and "Goli maaro saalon ko (shoot traitors)" made Kejriwal task easy. He took every care not to name PM Modi and desisted from showing aggression, he was once known.

But freebies, particularly free power is considered financially imprudent and poor policy choice. It, ultimately, leads to fiscal crisis as is the case in Punjab. A survey by the Punjab agriculture department sometime back indicated that more than 54 per cent of farmers had installed water guzzling submersibles, and more than 45 per cent got their motors renewed to increase the power, or simply purchased higher capacity motors. There has been an increasing use of groundwater for irrigating paddy but the rate at which the electricity was priced remained flat.

However, as the farmer’s electricity use shot up at an alarming rate; the quality, reliability and supply of electricity declined. Out of 137 blocks in Punjab, 110 were under the over-exploited category, according to the Central Ground Water Board,

Free 24X7 electric is populist vote-catching sop. In Punjab both Akali-BJP alliance and Congress have reaped rich political dividends by extending free power to even rich farmers, no matter how severely it ate out into state financial resources. And now Punjab govt will be under tremendous pressure to widen the scope of free power to all consumers. With Delhi victory, AAP, is set to emerge as strong political force , Free power will be a top election sop in next assembly election in Punjab due in early 2022.

Freebiees have, always, remained a bone of contention in the political debates, parties accusing each-other to promote them. During the run-up to the Delhi Assembly election, the issue of “freebies” of the AAP government was on forefront.

However, The Comptroller and Auditor General’s Report in 2019, on the Delhi government shows that AAP government has improved Delhi’s government finances. The report presented an overview of Delhi government’s finances between 2013 and 2018. The AAP government has consistently run a revenue surplus, meaning its current revenue was greater than its current expenditure. As such, AAP was one of the most fiscally prudent governments in India. Not only this, in 2015-16 and 2017-18, the AAP government had a fiscal surplus, something not witnessed too often in India. The report clearly, shows that AAP was not piling on debt to run its subsidy package.

The big question is where the money came from?

According to report, AAP has cut back on capital expenditure and invested this saving into education and healthcare. So most of us will agree that if there is strong will to ensure fast delivery of basic amenities, money is no problem. And I made a same case for Jai Ram Thakur govt. in Himachal after it took over from Congress govt two years back. But saffron party has failed to deliver desired results. It remains busy in playing the rhetoric. The situation in Punjab is too bad. The Congress govt headed by Raja of Patiala has only mismanaged the state finances. In the given situation, people will, surely. attract towards AAP's "freebiees". Just wait and watch.

(Chander Sharma)