Popular welfare schemes will be the focus of upcoming elections, but the unilateral focus to provide benefits to individual voter leads to less and less investment in public capital
Farmers had gathered early this year at Sansad Marg to participate in a mock Parliament. Credit: Vikas Choudhary/CSE With Karnataka going to polls for the state legislative assembly, the election festival season has started and will end with the general elections in May 2019. In the next six months, Madhya Pradesh, Rajasthan and Chhattisgarh will vote for respective assembly. Altogether, more than 150 million voters in these four states will cast their votes.
Close to 60 per cent of them belong to India’s officially poor population. Logically speaking, these elections should be fought on the issue of development. But the campaigns in Karnataka show that elections are turning out to be personality driven and are more centered on emotive issues than on local development challenges.
However, it might not be the case in Karnataka and the upcoming elections in the three northern and central states.
The results of Karnataka elections – even while accommodating space for the Indian reality of caste and clan led electoral politics – will make a statement on whether popular development schemes in poor states could influence elections. This is because, contrary to popular beliefs, Karnataka elections and so other coming elections are taking place without any wave in favour of or against any politician or political parties. News reports are very clear that the ruling Congress party in Karnataka is not facing severe anti-incumbency. On the other hand, Prime Minister Narendra Modi in last year of his term is no more that “pivotal factor” in the state where its government lost due to widespread corruption allegations just five years ago.
Thus, it is also the season to test whether popular government welfare schemes could influence elections. All the four states are known for their extensive and expansive popular welfare schemes that cover almost the entire population, specifically the poor population. A back of the envelop calculation shows that close to 130 welfare schemes are being implemented by these four states with annual budget allocation of over Rs 80,000 crore. These schemes benefit 60-80 per cent of the states’ population directly.
Except Karnataka and Rajasthan, rest of the states have been BJP ruled for 14 years now. These two states are known for their welfare schemes that cover expecting mothers to children to adult to cremation of dead. Their subsidised rice and basic health delivery schemes are extremely popular and effectively implemented. Many attribute these to the BJP winning elections for consecutive three terms.
In Karnataka, Chief Minister Siddaramaiah is popularly known as the “chief minister of bhagyas” due to his series of bhagya schemes. These include Ksheera Bhagya (milk), Anna Bhagya (food), Krishi Bhagya (farming), Pashu Bhagya (cattle), Arogya Bhagya (health), Indira Vastra Bhagya (cloth), Anila Bhagya (LPG connection), Shaadi Bhagya, Cycle Bhagya, Laptop Bhagya and Text Book Bhagya. These schemes benefit 80 per cent of the state’s voters and account for 40 per cent of the state’s annual budgetary allocation. He has been seeking election showcasing these schemes.
As psephologists and political analysts point out in media, these schemes might hedge the ruling party from the state’s traditional anti-incumbency and the high voltage campaign by BJP using its mascot Modi.
If Congress retains the state, it would be treated as a verdict on these welfare schemes. This raises a question: will it then mean that other three states would be re-elected using welfare schemes. Indicators from MP, Chhattisgarh and Rajasthan point out that the respective chief ministers are out showcasing their popular schemes. But, effective delivery of these schemes is what makes them relevant to voters. If voters don’t find them effectively being delivered they might as well go against the governments. In 2013, despite a slew of such welfare schemes, the then ruling Congress government in Rajasthan lost the elections amid allegations of massive leakages and bad implementation of various schemes. (Of course, it was the time when the United Progressive Alliance-II government at the centre started losing the battle against corruption cases and the Modi wave was about to take the shape of a tornado).
NDA’s rural dilemma
The NDA government has been carefully crafting its flagship programmes since 2015 to reap the electoral dividend. For example, the Pradhan Mantri Ujjawala Yojana that aims at providing LPG cylinder to BPL households. In the Uttar Pradesh assembly elections that gave a historic majority to NDA, this scheme was attributed to the victory. Many households who were not given the cylinder were excited with the promise of a “free” gas connection. Fuel wood is expensive and time-consuming to procure or collect. One way, this scheme made Modi literally a kitchen name. Women did vote more for NDA in UP. Similarly, looking at the universal health scheme of Karnataka, in the last budget NDA declared the Universal Health Protection scheme. This would definitely excite households that spend a lot on health related expenses. Another scheme called Stand Up India is aimed at availing loans to women belonging to SC/ST households up to Rs. 1 crore to start enterprises. This scheme targets the SC/ST communities that traditionally are not BJP voters; and women particularly who are a significant voters among the communities.
These four states currently account for close to one-third of BJP’s Lok Sabha seats; it won 85 per cent of the total Lok Sabha seats in these four states in the 2014 general elections. The four states have 744 legislative seats of which 600 are rural constituencies. And like in Gujarat where BJP had to struggle to retain due to rural voters’ uprising against the government, all the states have witnessed farmers’ protests in recent months. In all the states, the share of farm income in rural households’ total income is above 60 per cent. And the share of agricultural households in total rural households is in the range of 60-70 per cent.
On the other hand, agricultural growth has been slowing down. The country as a whole reported one of the lowest agricultural growths in the last three years, an average of less than 2 per cent. These states feature in the top five states with highest number of indebted rural households.
This context makes the next four elections more development-oriented. One can argue that emotive issues would be brought into forefront to avoid judgment on development delivery. But if voters are determined or are in a dire situation, they would rather vote on development agenda or performance of such schemes.
The problem with popular schemes
It is heartening to see welfare schemes deciding political fates. But there is a catch. When one digs carefully into these welfare schemes, it stands out clearly that governments select or implement schemes that ensure individual benefits. Like in schemes mentioned above the benefits are for individuals. Political parties have realised that the surest way to reap electoral dividend is through benefits to an individual voter. This probably explains why schemes now cover consumer products like TV, sewing machine, grinder, mobile phones, laptops and also spices. There is no harm in this. But when it happens at the cost of governments spending less on the capital building in different sector, it raises an alarm for long-term problems.
Take for example, the case of ensuring credit to farmers. According to the Committee on Doubling Farmers’ Income set up by the Union government, “The recent past has witnessed a healthy growth in the flow of agriculture credit, particularly since the introduction of the policy of doubling of agriculture credit by the Government of India. Agriculture credit grew at an overwhelming rate of 35 per cent per annum during the doubling period (2004-05 to 2006-07). For the period from 2003-04 to 2016-17, compound annual growth rate (CAGR) of agriculture credit was 21.47 per cent. Ground level credit (GLC) increased by 16.41 per cent during 2016-17 over the previous year.” According to this report, 77 per cent of landholders are now covered with institutional credit.
But, the ratio of capital investment loan to the overall agricultural credit is very low. This indicates that individual farmers are getting more and more loans but government’s priority is insufficient when it comes to giving loans for creating capital. This capital investment helps making the agricultural sector sustainable and thus, empowering farmers to take up farming without uncertainties such as access to irrigation and inputs like seeds. “A disquieting feature of agriculture credit in India, however, has been the poor share of investment credit in the total agriculture credit. In 2003-04, the share of investment credit in total agriculture credit was 37 per cent, which improved to 42 per cent in 2005-06 but declined to 19 per cent in 2013-14. However, with renewed emphasis on Term Loan, the share of investment credit in total agriculture credit has started showing signs of improvement as seen from 35.30 per cent in the year 2016-17,” says the report.
Nevertheless, at a time when the rural distress is widespread, any political buying in of rural welfare agenda is welcome.
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