It’s raining sops in Odisha. From free uniforms to jute bags, the Biju Janata Dal government is doling out freebies at a frenetic pace ahead of the elections. The latest meeting of the state cabinet approved Rs 1,000 to each of the 70 lakh members of women self help groups (SHGs) to buy uniforms. At least 1.5 lakh executive members of such groups would also be entitled to Rs 2,000 each to buy blazers. Last year, the government had rolled out a loan scheme for SHG members to enable them to buy scooters, entailing a provision of Rs 528 crore to take care of the interest subvention.
Women SHGs are a key constituency of the Naveen Patnaik government, which is seeking a sixth mandate on the trot. But the net of offerings has been cast wider. The government last week announced a one-time cash assistance of Rs 1,000 to each ration-card-holding family to help them fight price rise in essential commodities. Each of these 95.6 lakh families, translating to 3.35 crore of the population, will also get two jute bags—a gesture that will cost Rs 278 crore—to collect food from fair price outlets. Schemes worth Rs 2,000 crore have been announced in just one week, raising the hackles of opposition parties and economic analysts alike.
The key question is why the freebies and for how long? Two contrasting views have emerged. One critiques it as a form of appeasement of certain constituents. This comes at the cost of sound economics. The government has a history of churning out schemes—some new, some rehashed—close to elections. The colour of the freebies bags may have changed, but the freebies have not. The other view is that a healthy fiscal status allows it to dole out such sops.
A revenue-surplus state, Odisha’s loan payment obligations are among the lowest. Its capital formation as part of the state GDP is among the highest and helps it fund capital expenditure. Buoyant mining revenues and GST earnings have acted as cushion to open the purse strings for such populist schemes. So why not? However, there is unanimity in the view that the state must resist from joining the bandwagon of Karnataka and Rajasthan, where successive governments have not been able to get out of vicious cycles. Odisha must not fritter away its hard-earned fiscal advantage for short-term benefits.