Political Freebies In Karnataka Examining Congresss Election Guarantees

In the recent Karnataka state elections, political parties made significant promises of free benefits to voters, with the Congress party announcing comprehensive "guarantee" schemes that would substantially impact the state's finances. These political freebies, while not traditional consumer samples or promotional offers, represent an interesting case study in how governments distribute benefits to citizens. This article examines the nature of these political freebies, their financial implications, and implementation challenges based on available information.

Overview of Congress's Guarantee Schemes

The Congress party in Karnataka introduced five major guarantee schemes as part of its election platform, designed to appeal to various voter segments. These schemes promise substantial benefits to residents if the party forms the government. According to the sources, these guarantees include:

• Rs 2,000 per month to the female head of a family
• Monthly financial assistance for educated unemployed individuals
• 10 kg of free rice for every member of Below Poverty Line (BPL) families
• 200 units of free electricity to each home
• Free travel for women on state buses

These guarantees, collectively referred to as the "five guarantees," represent a significant commitment of public funds. The schemes target different demographics, from women and unemployed youth to low-income families, with the intention of broadening the party's appeal across various voter segments.

Financial Implications of Congress's Guarantees

The implementation of Congress's guarantee schemes would impose a substantial financial burden on Karnataka's state exchequer. Economic experts have calculated that these freebies would require significant annual expenditures:

• The Grihalakshmi scheme (Rs 2,000 per month to working women of BPL families) would cost approximately Rs 30,000 crores annually, given that there are 1.28 crore BPL card holders in the state
• Free bus travel for women would require an estimated Rs 3,000 crore
• Free electricity (200 units per home) would cost Rs 25,800 crores

These three major guarantees alone would impose a burden of approximately Rs 58,000 crore on the state exchequer. When combined with the other two guarantees (free rice for BPL families and monthly assistance for the educated unemployed), the total annual expenditure is estimated to reach Rs 50,000-65,000 crore.

Comparison with BJP's Promises

The Bharatiya Janata Party (BJP), the other major political contender in Karnataka, also announced freebies but on a smaller scale according to the sources:

• Free half-litre of Nandini milk to 1.17 crore BPL card-holder families, costing approximately Rs 8,000 crore annually
• Free LPG cylinders to 1.17 crore BPL card holders, requiring Rs 3,700 crore per year

These two promises would add an estimated Rs 12,000 crore burden on the government exchequer, significantly less than the Congress's commitments. This disparity highlights the different approaches taken by the major parties in their election strategies, with Congress opting for more extensive freebies to attract voters.

Economic Context and Concerns

Karnataka's economic situation adds complexity to the feasibility of implementing these extensive freebie schemes. The state is facing significant financial challenges:

• There is a revenue deficit of Rs 14,699 crore in the state budget for 2022-23
• According to the Medium Term Financial Plan of 2022-26, 90% of total revenue collection will go toward fixed expenditure only
• Karnataka's Gross State Domestic Product (GSDP) for 2023-24 is Rs 23.33 lakh crore, with a fiscal deficit of Rs 60,531 crore
• The fiscal deficit exceeds the recommended limit of 3% of GSDP

Economic experts have expressed concerns that these freebies would give a big blow to Karnataka's economy, which is still recovering from the economic hardships of the Covid-19 pandemic and lockdowns. The burden on the exchequer would increase manifold, leaving insufficient funds for capital expenditure and essential development projects.

Additionally, Karnataka's share of the Centre's total budgetary expenditure has decreased to just 1.1 percent. Between 2016-17 and 2019-20, states were receiving 46 percent of the Centre's total Budget; this has now decreased to 36 percent, representing a drop of Rs 4.6 lakh crore in transfers to states. This reduction in central transfers further complicates the state's ability to fund extensive guarantee schemes.

Implementation Challenges

Beyond the financial implications, the implementation of these guarantee schemes presents practical challenges. The Congress party has already begun facing difficulties with some of its flagship programs:

• There are allegations that the Karnataka Congress government has unpaid bills worth Rs 300-350 crore to over 450 vendors, who have threatened "mass suicide" and claim that 6,000 families are in financial distress as a result
• The Shakti scheme (free bus travel for women) has faced internal debates within the party about potential misuse, with some women reportedly traveling repeatedly to the same places
• There are discussions about implementing a cap on the distance women can travel for free under the Shakti scheme, which would require issuing smart cards to track distance traveled

Internal Party Debates

Even within the Congress party, there have been discussions about reviewing and potentially modifying the guarantee schemes. Deputy Chief Minister DK Shivakumar suggested that the popular Shakti scheme should be reviewed, which led to Congress president Mallikarjun Kharge reprimanding him. However, senior lawmaker RV Deshpande backed Shivakumar, stating that he made the suggestion with good intent.

Deshpande, who heads the administrative reforms commission, acknowledged that while the guarantees are good programs, they are being misused in some places. He noted that "giving things free of cost...it's as good as it's dangerous," emphasizing the need for transparency and ensuring that benefits are provided only to the extent that one deserves.

Despite these internal discussions, Chief Minister Siddaramaiah and Deputy Chief Minister Shivakumar have clarified that there is no proposal to review any of the guarantee schemes, including Shakti. Shivakumar has expressed pride in the guarantee model, stating that "it is a model for the entire country" and noting that other parties, including the BJP, are adopting similar approaches.

Conclusion

The political freebies promised by Congress in Karnataka represent one of the most extensive election guarantee packages in recent Indian political history. While these schemes aim to provide direct benefits to various voter segments, they come with substantial financial implications that could strain Karnataka's already challenged economy. The estimated annual cost of Rs 50,000-65,000 crore would significantly increase the state's fiscal deficit, potentially limiting funds for essential development projects.

The implementation of these guarantees has already faced challenges, including vendor payment issues and concerns about potential misuse. Internal party debates about modifying aspects of the schemes, particularly the Shakti scheme, indicate that the Congress leadership is grappling with the practical realities of delivering on ambitious promises.

As Karnataka moves forward with implementing these guarantee schemes, the state will serve as a case study for other regions considering similar approaches to political freebies. The ultimate success or failure of these programs in delivering benefits to citizens while maintaining fiscal sustainability will likely influence political strategies across India in future elections.

Sources

1. Karnataka: Congress outruns BJP in 'freebies race' by huge margin
2. Challenge for Congress to give out freebies in Karnataka
3. Another fallout of mindless freebies?
4. Freebies are as good as they're dangerous, says Cong MLA R V Deshpande