In the introductory chapter of his seminal essay, ‘The Eighteenth Brumaire of Louis Bonaparte’, Karl Marx says, “History repeats itself, once as tragedy, and again as farce.” In India’s political landscape, history repeats itself first as farce and then as a mockery of farce.
On Friday, Himachal Pradesh Chief Minister Sukhvinder Singh Sukhu informed the state Assembly “I am suspending mine and state ministers’ and CPS’ salary allowances for two months.” The reason: his government was making efforts to increase its revenue and reduce unproductive expenditure. It isn’t clear what is deemed “unproductive expenditure” but the “symbolic gesture” would save the state barely Rs 2 crore.
The price of political profligacy has come home to roost. Data released by Reserve Bank of India shows between 2014 and 2024 the total outstanding liabilities of Himachal Pradesh has shot up from Rs 33,877 crore to Rs 94,992 crore; it currently spends over Rs 5,400 crore per year in interest payments. That a state once held up by the World Bank as a model for development finds itself in this plight is indeed a tragedy.
It’s not just Himachal. Every election season, parties march to the tune of new sops and top-up schemes. In the run up to the Lok Sabha elections, the Eknath Shinde regime announced the Namo Shetkari Mahasamman Nidhi Yojana—a top-up of Rs 6,000 to the Rs 6,000 paid to farmers under the PM Kisan Samman Yojana. This month, in preparation for the assembly elections, the Maharashtra government initiated the Mukhyamantri Majhi Ladki Bahin Yojana, which promises Rs 1,500 a month to 10 million women across the state. The scheme will cost the state exchequer Rs 46,000 crore. Already, in 10 years, the outstanding liability of Maharashtra spiralled from Rs 3.09 lakh crore to Rs 7.22 lakh crore, and has cost the state over Rs 47,000 crore in interest payments.
Start-up entrepreneurs deploy proof of concept to launch products and raise funds. For politicians, the proof of concept is electoral success. Madhya Pradesh, under Shivraj Chouhan, propelled the fortunes of his party with the Ladli Behna Yojana; soon enough, others followed suit. At least 10 states have active schemes or are working on prototypes—this election season has Jharkhand and Haryana (besides Maharashtra) announcing schemes.
The cost estimates for cash transfers to women voters merit attention. Karnataka’s Gruha Lakshmi costs the state Rs 32,000 crore, MP’s Ladli Behna around Rs 19,000 crore, West Bengal’s Lakshmir Bhandar Rs 12,000 crore, Tamil Nadu’s Kalaignar Magalir Urimai Thogai Rs 12,000 crore, Telangana Mahalakshmi scheme Rs 3,800 crore, Jharkhand’s Maiya Samman Yojana around Rs 5,000 crore, Delhi’s CM Mahila Samman Rs 2,000 crore—and the list goes on. The use of taxpayer monies to acquire votes is not limited to one scheme. The Congress’s five guarantees in Karnataka costs the state around Rs 65,000 crore.
Costs have consequences. The total outstanding liability of all states has rocketed from Rs 25.10 lakh crore to Rs 83.32 lakh crore. The total outstanding liability of the youngest state, Telangana, is up from Rs 72,658 crore in 2015 to over Rs 3.89 lakh crore, costing the state Rs 22,244 crore in interest payments. The top 10 states on the list of outstanding liabilities are: Tamil Nadu, Uttar Pradesh, Maharashtra, West Bengal, Karnataka, Rajasthan, Andhra Pradesh, Gujarat, Kerala and Madhya Pradesh.
Indeed, in 2022, the RBI cautioned on the risks to state finances, “New sources of risks have emerged in the form of rising expenditure on non-merit freebies, expanding contingent liabilities, and the ballooning overdue of DISCOMs.” States are spending on vocal constituencies—the bill for wages and salaries rose from Rs 4.25 lakh crore to Rs 8.78 lakh crore between 2014-15 and 2022-23. The latest state finance report reveals that 19 states are running revenue deficits. The warnings have not awakened fiscal accountability.
Taxpayer-paid vote acquisition comes at the cost of essential services—in the 10 years since 2014, the outlay for education (all states and UTs) edged up from 2.6 percent to 2.7 percent of GDP, allocation for health has crawled from 4.8 per cent to 5.6 percent of aggregate expenditure. The reason urban India is wallowing in floods and lament year after year is that development expenditure is only 11.9 percent and capital outlay is barely 2.9 percent of GSDP across states.
Ironically, the embrace of sop populism has been amplified by two major reforms aimed at better governance. The digitalisation of welfare, thanks to Aadhaar, Jan Dhan and direct benefit transfers, allows governments to initiate a programme at the launch of a code—the NPCI platform has over 3,000 codes registered for state government schemes. And the money needed to pay for the sops is made available by assured and predictable flow of GST revenues—now averaging at Rs 1.7 lakh crore a month collected from taxpayers.
The myth of responsible politics was shattered long back. In 1989, Janata Dal came to power propped by BJP and CPI(M). Soon after taking over as prime minister, V P Singh declared “the coffers are empty”. That did not stop his finance minister, Madhu Dandavate, from announcing Rs 1,000-crore loan waivers for farmers. Neither did allies dare object despite the circumstance.
Engineering solutions is difficult. Sops are easier. It is scarcely surprising that every election season witnesses sop innovations—elections are less a race between parties and more a competition of schemes. As the American playwright Eugene O’Neill said, “There is no present or future—only the past, happening over and over again—now.”
Shankkar Aiyar
Author of The Gated Republic, Aadhaar: A Biometric History of India’s 12 Digit Revolution, and Accidental India
(shankkar.aiyar@gmail.com)