Flood of freebies in odisha

The scheme-a-day juggernaut is clearly on the roll in Odisha. As the race to the elections starts, freebies are flowing. In the last three days, the state government has unveiled as many schemes—from LED bulb distribution to a hike in honorarium for 1.45 lakh anganwadi workers.

When mass appeasement is the mantra of the political class and farm loan waiver schemes are announced within hours of government formation in India, why should the Naveen Patnaik government be expected to exercise restraint? Economics be damned, there is an election to be won, after all! Most such schemes—their intentions notwithstanding—are hurting the state’s economy. 

Last month’s Krushak Assistance for Livelihood and Income Augmentation, estimated to cost `10,180 crore over three years, required the government to source `1,000 crore from its contingency fund (CF) to meet the current fiscal’s provisioning. Now an ordinance is needed to enhance the corpus of CF so that exigencies can be met. Similarly, the hikes for anganwadi workers would cost `80 crore annually. Besides doling out financial assistance to graduate and PG students from underprivileged sections, the state has already offered interest-free loans and seed money to 15 lakh new women self-help groups and much more.

All these only add up to huge and recurring costs. The 15th Finance Commission recently lauded the government for its fiscal management but was correct in pointing out that Odisha’s progress in agriculture, health and education continue to be way below the national benchmark. That’s where the real problem of populism lies: It does not transform the lives of the people it targets.

The Commission cautioned that despite high growth rate, the state’s economic scenario remains significantly volatile and inconsistent. This must be heeded. While the need for fiscal prudence cannot be overemphasised, history would judge the incumbent government for running up a debt of over `90,000 crore in 19 years. That is not something Naveen would want.