Congress poll guarantees: Haryana set to bear financial burden of populism

If the Congress gets to form the government in Haryana in 2024, one of the toughest jobs in the new government will be that of its finance secretary.

The grand old party on Wednesday announced a please-all abridged election manifesto containing seven guarantees, including doubling the social security pension for the elderly, widows and the disabled to ₹6,000 a month, a monthly stipend of ₹2,000 to all women, free electricity of up to 300 units for domestic consumers and subsidised cooking gas cylinder for ₹500.

The announcements, if implemented, are set to balloon the revenue expenditure of the state government in a rather extraordinary manner, burdening the state exchequer and disturbing fiscal indicators.

A tentative estimation of the financial implications of the freebies announced by the Congress entails an additional expenditure of about ₹10,900 crore alone on account of doubling the social security pension amount for 31.51 lakh beneficiaries from ₹3,000 to ₹6,000 a month.

“As per the 2024-25 budget, the provision for social security pensions had increased from ₹1,753 crore in 2013-14 (about 3.2% of the total budget expenditure) to ₹10,971 crore in the 2024-25 financial year (about 5.78 % of the total budget expenditure). Since 2014, the number of beneficiaries of social security pensions have increased from 22.64 lakh in December 2014 to 31.51 lakh. If the pension amount is doubled, the expenditure also gets doubled,” said an official.

Similarly, the ₹2,000 a month monthly stipend promised for the women, financial experts said, would entail an implication of about ₹16,800 crore annually on the state exchequer even if only 70 lakh below the poverty line (BPL) women are given the benefit. The financial burden would be much higher if all women are made beneficiaries.

Officials said that the electricity subsidy bill of the government will go up by another ₹3,200 crore if the Congress provides 300 units of free electricity to 45 lakh domestic households. The state government has already committed ₹6,350 crore for rural electrification subsidy this fiscal to provide cheap power to the farm sector.

Similarly, by promising to provide a cooking gas cylinder for ₹500, the new government will have to bear a subsidy of about ₹320 a cylinder. “If 30 lakh BPL families are provided subsidised cooking gas, the new government will get itself burdened with an additional expenditure of about ₹1,200 crore annually,” said the official.

Officials said that financial implications of implementing the old pension scheme and other sops will adversely affect the financial health of the state.