What if we don’t drink or drive?

Immediately after the state Assembly elections, the new Congress government moved to implement the party’s pre-poll promises. Free power to most homes, monthly payments to women-led households, free rice to every BPL person, an unemployment subsidy, and free bus travel for women. There was widespread acknowledgment that these promises had been the key reasons for the party’s victory, and people would be watching to see if they were kept.

The government has recognised this, and is advertising and hailing each new scheme that is being rolled out to keep the commitments. In the revised budget, presented after the election, the Chief Minister indicated that nearly Rs 40,000 crore would be spent on these commitments in the current financial year. Full-year figures for the next year could be as high as Rs 60,000 crore. That’s about one-sixth of the budget.

That’s a lot of new commitment. How will it affect expenditure on other programmes? Soon after the budget was presented, we began hearing that there would be less money available for other development programmes this year. Clearly, the roll-out of these schemes is the primary ‘achievement’ with which the party intends to go into the Lok Sabha polls in less than a year’s time. Meanwhile, other things have to wait.

Doing the numbers is one thing. But finding the money for the new schemes is a very different thing. How does the government propose to finance them? The CM’s budget speech provided the answer -- more taxes on alcohol, more taxes on properties, more taxes on some categories of vehicles, and lots of new borrowing. And better enforcement to ensure that people aren’t avoiding paying taxes.

If you don’t want to pay more taxes, this is a good time to be thinking about drinking less and driving less. Doctors and urban planners have been urging us to cut down on these things for decades, anyway, and perhaps these taxes could eventually nudge enough people to make the switch to fruit juices and public transport. But the government needs these revenues to help the poor. What a dilemma!

It’s bizarre that the things we were urged to avoid -- more alcohol, more vehicles, and more over-priced properties that push the poor out of our cities -- are now the things that the government is pinning its hopes on to fund its new initiatives. Can this arrangement last long, or will it collapse under its contradictions? We’ll know as the schemes roll out, but there are some early signs of what to expect. All the schemes will only be partially implemented.

Bus services for women will be free, but in many areas, there will not be many buses. This will also force people to buy more vehicles, which will bring in more revenues as well. Not all families will get a break on their monthly power bills. There will be many who will not get their free rice. Lots of youth won’t get their unemployment cheques. But despite all this, there will be enough people who do get the new benefits. And that’s the plan for now.

There’s one other hiccup. While the schemes add up to a chunk of expenditure for the government, they don’t put much new money in the hands of people. The total bill is large because there are so many poor people, not because each of them is getting a lot from these schemes. Every little bit helps, of course, especially if one is very poor. But these funds are not going to change the fundamental reality of deep poverty that millions of people face.

Giving money to the poor is half the answer. The other half, which is equally important, is to empower them in ways that reduce their risk of poverty in the future. The two biggest line items to achieve this are education and health. Better schooling, in particular, can create a more productive workforce in 10 years, and fire up the economy. We’re still under-investing in this. That sets us up for a long stint of subsidy payments, rather than a path out of poverty.

If politics has turned into a contest to see which party can give the public more, that’s not such a bad thing. In a sense, that’s what the politicians were supposed to do in the first place. For the longest time, they’ve been getting by with handing out just a little. Now the promises are bigger, and so are the bills to keep them. This is only the beginning of a new chapter.