One Man’s Freebie Is Another Man’s Welfare Scheme
Madhya Pradesh's schemes arrive amid escalating debt, and rising election fever
Twenty-eight-year-old Farha Khan, was joyous when she first heard about the ‘Ladli Behen Yojna’ announced by Madhya Pradesh Chief Minister, Shivraj Singh Chouhan. Without delay, she headed to her local ward office in Bhopal with all the necessary documents to register for the scheme.
Four months after the scheme's announcement, Farha has received two installments of Rs 1,000 each. According to government data, around 1.25 crore people have received two installments of the promised sum. A new registration process to avail the benefits of the scheme has recently reopened on July 25, 2023.
“I had been unable to pay the re-registration school fee for my kids. There was hardly any money left from our meagre income to cover their education expenses due to the rising prices. I will use this money to fund my children's education," Farha told The Citizen.
Having been in power for the last 18 years in the state, the Bharatiya Janata Party (BJP) government has introduced this scheme seven months before the Assembly elections. Congress, the main opposition party in the state, has accused the BJP of trying to manipulate voters by indulging in distributing freebies through these schemes.
Congress Madhya Pradesh media in-charge K.K. Mishra, told The Citizen that this was the BJP’s, “last-minute desperation to woo voters after miserably failing in ruling the state for the last three years. On one hand, the Prime Minister says that freebies are not good for the country, and then, at the same time, the Chief Minister in Madhya Pradesh announces a spree of these election-bound schemes, calling them welfare programs to purchase votes.
“They seem certain about their departure from the state, so why not make false promises and further burden the state financially? This kind of mismanagement will only create difficulties for the succeeding government.”
It is pertinent to note that in July 2022 Prime Minister Narendra Modi criticised the ‘freebie culture’ while inaugurating the Bundelkhand Expressway, “Today in our country, attempts are being made to collect votes by distributing free revdis (sweets). This revdi culture is very dangerous for the development of the country. People of the country, especially the youth, need to be careful of this revdi culture. People of revdi culture will not build expressways, airports, or defence corridors for you.”
However, on June 10, 2023, Chief Minister Shivraj Singh Chouhan said that the ‘Ladli Behna Yojana’ is not a freebie but a “transformative social revolution”. He claimed that the scheme aims to improve the standard of nutrition, fulfil educational needs, and provide for the basic necessities of children. The initial installment of Rs 1,000 is to be revised to Rs 3,000 once sufficient funds are arranged.
According to the State Election Commission, the ‘Ladli Behna Yojana’ covers over 1.26 crore female voters out of the total 2.60 crore women voters in the state. This coverage represents 48% of Madhya Pradesh's entire electorate, which stands at 5.39 crores.
During this election season, the Shivraj government has been actively announcing various schemes, one of the notable ones being the ‘Ladli Behna Yojna’, but it's not the only one. The government has been making a series of announcements, covering welfare measures, religious initiatives, and developmental projects. For instance, they announced irrigation projects worth ₹5,477 crore during a farmers' convention in Mandsaur.
Additionally, a significant budget of ₹100 crore was allocated for the ‘Saint Shri Ravidas Temple Harmony Journey’ project in Sagar. The government has also undertaken several initiatives to promote development and welfare across the state.
Notable among them is the ‘Handiya Micro Irrigation Project’, which involves an investment of ₹1,294.27 crore. Additionally, the ‘Mukhya Mantri Bal Ashirwad Yojna,’ pledges ₹4,000 per month to orphans, and the ‘Kisan Samman Nidhi Yojna’ is another major scheme.
Recently, the government announced the 'Seekho Kamao Yojna,' aimed at providing registered trainees with a monthly stipend of ₹8,000 to support their learning and development. Furthermore, the honorarium for nearly one lakh Anganwadi workers has been raised from Rs 10,000 to Rs 13,000. Moreover, a provision of Rs 135 crore has been made to provide e-scooties to students.
The CM has also committed to doubling the honorarium of employment assistants from Rs 9,000 to Rs 18,000. The district panchayat president, vice president, deputy sarpanch, and panch will also have their honorarium increased threefold. The government also issued an order in July to bring 1.5 lakh workers at par with regular government employees in terms of salary and other facilities.
Talking to The Citizen, Rajneesh Agarwal, BJP’s state secretary, rubbished the Congress claims that these were freebies and insisted on them being Welfare schemes. “Our Fiscal space is very good. We have the capacity to put money into these schemes. Our state collection of GST is pretty good and we can afford to put money into revenue expenditure. We are in a very safe economic space. Our Debt is just 22 per cent of the GDP which is much better than other states. The Reserve Bank of India has put a limitation on borrowings and we are very much under that limitation” Agarwal said.
Critics, however, point out that despite an estimated budget surplus, the debt of the state is high. The per capita debt of each citizen in Madhya Pradesh has exceeded Rs 41,000, witnessing a growth of more than 12 per cent over the past year. Notably, the average individual debt in the state has been steadily rising over the last decade.
“The situation is so poor that the Madhya Pradesh government is taking a loan to pay interest. The escalating borrowing is becoming unsustainable, with the state currently paying a whopping 25% of its GDP as interest annually. If this trend continues for the next two to three decades, it will become increasingly challenging to meet the interest payment,” Mishra said. He highlighted that when all other options for taking loans are exhausted, states resort to borrowing from the Reserve Bank of India, which is now the last avenue for them. “The state is already heavily reliant on this option, borrowing massive sums from the RBI on a monthly basis,” Mishra added.
To understand the current economic situation of the state and the debt trap, The Citizen spoke to Dr Kanhaiya Ahuja, Professor of Economics at the reputed Devi Ahilya University in Madhya Pradesh. “See, the problem is not limited to the BJP alone; whether it's the BJP, Congress, Aam Aadmi Party, or any other party, these schemes, regardless of who announces them, will have an impact on the fiscal position of the state.
“I want to emphasise that it's not just about the BJP government in this state; it has become a trend across the entire political spectrum, and everyone seems to be adopting it. While it may make sense to have schemes targeted towards marginalised communities in need of government support, extending benefits to everyone is not sound economics. Such populist measures put a heavy burden on taxpayers and adversely affect the overall economic health of the state. And let me reiterate, this issue is not limited to Madhya Pradesh alone; one can observe similar announcements and practices in Delhi and Punjab by the AAP leadership,” Ahuja explained.
He also emphasised that rather than helping the economy, such measures and free sops lead to inflation as the money going to these people will create additional demand in the market leading to inflation.
Amid this, the dozens of beneficiaries of the schemes who The Citizen spoke to, reflected feelings of both hope and cynicism. Many believed that these election schemes would help them in their daily lives, enabling them to buy LPG cylinders and pay for their children’s education. Many others thought the amount being given to them was too small, and will hardly make a difference to their lives.
“This is good for us, who doesn't like money coming into our accounts, but what's the point of this money when the prices of everything are so high? They are giving us Rs 1,000 but our expenses have increased manifold. It is more important for the government to control prices along with giving us money," said Sunita Jaiswal, a resident of Sanjay Nagar in Bhopal.
A farmer from the village Baharwal close to Bhopal said, "They have promised to raise the amount from Rs 4,000 to Rs 6,000 under Kisan Samman Nidhi Yojna, but you tell us, what will a farmer do with a raise of Rs 2,000 annually, which comes down to around Rs 180 a month? There is no guarantee that this will continue once the government changes. The government should take more concrete steps to improve our condition and lift us from poverty.”
The Opposition Congress is also making new promises alongside their five guarantees, these include reviving the old pension scheme, providing affordable gas cylinders, offering a monthly allowance to women, providing subsidised electricity, and implementing a farm loan waiver.
On July 26, former Chief Minister and MP Congress Chief Kamal Nath made a fresh promise called the 'Krishak Nyay Yojana' (farmers' justice scheme) aimed at reducing agricultural input costs. The scheme includes free power for agriculture pumps, up to five horsepower for 37 lakh farmers, waiving dues for agricultural power usage, 12 hours of uninterrupted power supply for farmers, withdrawal of unjustified police cases against protesting farmers, and continuing the loan waiver scheme.
Meanwhile, a student applying for the internship scheme ‘Seekho Kamao Yojna’ raised concerns about the government's approach to advertising the program. Billboards across Bhopal city prominently displayed, "Mama ji ne dilaya Hunar or Sath mein 8,000 Rs," without clearly mentioning the name of the scheme or the registration process. This indicates the government's emphasis on garnering votes rather than ensuring the timely disbursement of the promised Rs 8000 stipend to students," he said.
During the Monsoon Session of the state assembly, Madhya Pradesh Chief Minister Shivraj Singh Chouhan's government revealed that it has made a total of 2,715 announcements in the last three years. This information was provided in response to a query raised by Ramchandra Dangi, a first-time Congress MLA representing Rajgarh district's Biaora constituency. But no data was given on the implementation of these announcements.