Friday, April 22, 2022

Misguided concern.

"It is one of India's tragedies, that a hyper-competitive, first-past-the-post populist democracy has helped bad economic ideas gain faster traction than good ones. You only need one state to start offering something 'free', and soon it becomes a national obsession," wrote R Jagannathan. Apparently, it all started when "Telugu biddas' (meaning Andhra Pradesh) offered farm loan waivers in 2014. In March, "The Aam Aadmi Party (AAP) won 92 out of 117 seats in Punjab," HT, by promising free water and free electricity up to 300 units. Now it is the "BJP-governed Himachal, which has promised 125 units of free power, and no water bills in rural areas, in the run-up to next state elections". As a result of the policy of free electricity, "As of January 31, 2022, the debt of power discoms (distribution companies) towards central power generation stations, IPPs and renewable energy generators stand at Rs 98,722 crore (Rs 987.22 billion). If the dues to state gencos are also included, the total outstanding dues of discoms would be Rs 1.6 lakh crores, said a statement from the Union Ministry of Power," Mint. "A surge in demand for electricity has prompted states including Punjab and Uttar Pradesh in the North and Andhra Pradesh in the South to cut off supply. The disruption, as long as eight hours in some places, is forcing customers to either endure the heat or look for costlier back-up options," ET. "The political dialogue built around freebies is fraught with danger," said former Chairman of the 15th Finance Commission NK Singh. "Therefore, it's not about how cheap the freebies are but how expensive they are for the economy, life quality and social cohesion in the long run. We must dread the thought of replicating the culture of competitive freebies." "In a marathon meeting of Prime Minister Narendra Modi with senior bureaucrats, a few officials raised concern over populist schemes announced by several states, claiming they are economically unsustainable and could take them down the same path as Sri Lanka, sources said," News18. While criticising state governments, no one seems to have the courage to point out the numerous freebies announced by the PM himself, jagranjosh.com. The India Shining campaign by the BJP led to then Prime Minister Atal Behari Vajpayee losing the general election in 2004, wrote Yashwant Deshmukh & Sutanu Guru. "Modi has probably learnt from mistakes of his predecessors, and has only upped the game with one massive social welfare scheme after another. If the 2019 verdict had the stamp of solid approval for Ujjwala from female voters, Modi followed it up with the first dose of ration, cash in the account of farmers, housing, toilets and so on." "The share of cesses and surcharges in the gross tax revenue of the Centre has nearly doubled to 19.9 percent in 2020-21 from 2011-12," and "Under existing Finance Commission (FC) framework, the cesses and surcharges collected by the Centre are not part of the tax devolution," BS. Which means Modi is not sharing the booty with the states. States are being pushed towards Sri Lanka. But who will dare tell Dear Leader?         

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