CHENNAI: Both the Dravidian majors have promised a pile of freebies ahead of the elections. But are the promises feasible, considering that the State’s revenue deficit has tripled to Rs 65,994 crore? The monetary value of populist schemes is “astronomical”, says economist Jeyaranjan.
A dole of Rs 1,000 per month to housewives could cost the exchequer Rs 24,000 crore a year. If the dole is Rs 1,500, it would shoot up to Rs 36,000 crore a year.
Similarly, six free LPG cylinders in a year would translate to a mega Rs 10,000 crore at today’s cost of Rs 835 per cylinder. This, is just the beginning of the long list of promises.
“Pro-poor schemes must not be dismissed with contempt, but parties must explain how they would finance their schemes,” said economist and professor Venkatesh Athreya. He pointed out that the large fiscal deficit is not a bad thing presently, as it would stimulate demand.
“The government can strengthen the purchasing power of the people, which will boost the economy,” Athreya added, but cautioned that the announcements must not be frivolous. “The manifestos could have highlighted how they would implement the schemes - whether they would increase the tax on the rich or so,” he pointed out.
Experts felt some parties do not feel the “obligation” to explain the mechanisms of implementation, and thus, could announce “frivolous” schemes.
However, it is not the same for a party that may have “winning prospects”, as it would be held accountable for it, pointing out that both the manifestos are different and can’t be measured on the same level.
The DMK has termed some of its announcements carefully under a tag ‘10-year vision’.
An economics professor at a top government college in Chennai said the State running at a loss is not new, and that even MTC runs in deficit.
