Ahead of polls, govt shifts priority

There appears to be a clear shift in the government’s priorities for expenditure ever since Jagadish Shettar took over the reins of power about a month ago. 

With fast-approaching Assembly elections on the one hand and constant goading by the party strongman Yeddyurappa on the other, Shettar has generously loosened purse strings to please the voters. The expenditure on almost all major beneficiary-oriented schemes, as a result, is likely to shoot up.

The increasing expenditure, it is feared, would even impact the plan schemes of the current budget.

The plan expenditure for the year has already been squeezed for giving a salary hike to government employees.

Whether it is crop loan subsidy, Bhagyalakshmi scheme (distribution of insurance bonds to girl child) or social security pensions (old age pension, destitute widow pension, disability pension and Sandhya Suraksha Yojane), the Jagadish Shettar government has either increased the budgetary allocation or taken measures in such a way that they will drain the State coffers in coming days.

And, there is every indication that the government may become more ‘generous’ in the days to come as the Opposition Congress is ready to take to streets on the ‘failure’ of the ruling party in helping the poor.

Contradiction

The generosity being displayed by the government contradicts its own stated goal of cutting mounting expenses on eight major  beneficiary-oriented programmes to ensure fiscal discipline. The government has in its 2012-13 budget document listed out these schemes, which had impacted the revenue balance in 2011-12 fiscal.

In 2011-12 fiscal, the government had spent an estimated Rs 9,561 crore on these schemes, covering 1.81 crore people. And, going by the announcements and additional allocations made so far, the government will end up spending about Rs 4,141 crore more in the current financial year on these schemes compared to last year.

Besides Rs 3,600-crore loan waiver schemes announced recently (the actual made for the crop loan subsidy in the budget this year was Rs 300 crore), the government has made additional allocation of Rs 250 crore for Bhagyalakshmi scheme under the supplementary budget.

The scheme had got Rs 468 crore in the main budget. With the additional allocation, the total budget for the scheme has increased to Rs 718 crore. The allocation in 2011-12 fiscal was Rs 408 crore.

The government, official sources said, has issued a strict instruction to the Women and Child Development department to clear all 1.31 lakh pending applications under the scheme by February next year – ahead of the Assembly polls. In the recently concluded Legislature session, Yeddyurappa had pulled up the department Minister Kalakappa Bandi for not clearing backlog applications under the scheme.

The government has increased social security pensions - the total number of beneficiaries has increased from 31.90 lakhs in April, 2012 to 32.71 lakhs in July.

The ceiling imposed by the Finance department for sanctioning fresh pensions was withdrawn. Increased number of beneficiaries mean increase in expenditure; additional burden due to this is expected to be around Rs 100 crore, officials said.

The government’s move to accept manually generated income certificates for issuing new BPL ration cards, is likely to undo efforts it had made so far to weed out bogus cards. It is easy to get fake income certificates if it is manually generated.

Hitherto, the Food and Civil Supplies department used to accept only computer-generated income certificates from the applicants and used to verify their authenticity online.

The government had in 2011-12 weeded out about 10 lakh bogus beneficiaries under social security pension schemes, and it was expecting to bring down the expenditure by about Rs 400 crore in the current fiscal.

Similarly, the government had cancelled about 30 lakh bogus ration cards last year.

As far as free power to IP sets, which consumes lion’s share of the budgetary spending on subsidies, the government is in no mood to cut down expenditure in this regard in the election year. It has allocated Rs 4,450 crore for this purpose, against Rs 4,156 in last year – an increase of Rs 394 crore.