The ultimate motive and vision of the political parties of our times are the same- must win the election in any way, seize power. To accomplish this, they tend to tempt people by offering lucrative and unrealistic dreams. Promising surreal things, and distributing currency notes right before the polling just to attain power is all that has been happening for ages in our state. Once they come to power, they will do nothing for years, then all of a sudden when its time for the elections, they offer freebies, provide subsidies, and showcase some welfare schemes which will be implemented only after the elections (if at all they come to power). There are serious consequences to the activities like this, and our neighboring country at the southern dip- Sri Lanka is quite an example.
The Sri Lankan crisis is living proof of what it might be like if one party competes with another party to win the election with the irregular schemes and policies eventually causing economic devastation. There were arbitrary debts and unproductive spending. Sri Lanka, which has now become a pile of debt, and not in a position to get new debts as the old debts have piled up drowning the country all at once. What everyone here needs to know is that electing the right leaders is the most important thing, and if it is not done right, the citizens might eventually end up facing hell.
The Sri Lankan crisis is a lesson for us. We have a lot many states in India that provide too many freebies to their people, just to attract them to grab the votes. For example, Telangana was once blessed with a surplus budget until the formation of a separate state. But now financial experts say it has become a pile of debt. It is said that the reason for this is that cash flow is running rampant in the name of welfare. There is nothing wrong with upbringing the poor, but is it a well-executed plan? this is very crucial. Look at the Raithu Bandhu scheme, it was brought in to be supportive to the farmers to bring agriculture into growth. However, there are allegations that there is a lot of manipulation in this. This assistance is useful for a farmer who owns one or two acres, but it is also applicable to a person who owns 50 acres. Criticism has been leveled that most the people actually offer their lands to other farmers who cultivate it, and this scheme actually benefits the rich landlords who own tens of acres of land, but not the poor farmer who cultivates it.
If we take a look at the economic situation of Telangana from 2020 to 2021- the state’s net income is Rs 1.25 lakh crore. Of this, Rs 60,000 crore is enough to cover salaries, pensions, and interest on loans. The remaining 50 percent is spent on capital expenditure. This will generate income. However, free schemes are estimated to cost up to Rs 60,000 crore. Experts say the debt incurred in 2020-2021 will be Rs 50,000 crore. The total debt as of March 2021 is said to be Rs 2.32 lakh crore. Of this, 45 percent is to be repaid in the next seven years. That means up to Rs 1.06 lakh crore must be paid. And is it possible? RBI interest, on the one hand, interest from other institutions on the other hand, as well as the implementation of free schemes. It is estimated that new debts are required to meet all these needs.
Recently SBI has expressed concern over free schemes. It said that the schemes being implemented in many states would have a profound impact on the economy. SBI warned that all those benefits will eventually lead to disaster in the financial sector. SBI experts have released a report reviewing the budget allocations of 17 states. In the case of Telangana, 63 percent of its own income is spent on welfare. Expenditure on welfare accounted for 63 percent of the revenue generated by the state in the form of taxes and mining.
According to the budget prepared by the Telangana government for the current financial year, it intends to raise Rs 1.08 lakh crore through taxes and Rs 25,421 crore through mining and general services. It is estimated to raise a total of Rs 1.33 lakh crore based on its own resources alone. Of this, Rs. 62,174 crore. Apart from these, many welfare programs on behalf of the SC, ST, BC, Minority, etc. departments incur huge expenditures. It is estimated that a total of about Rs 85,000 crore is being spent on subsidies and welfare alone.
The then surplus state has become somewhat a debt-ridden one, for a number of reasons. The role of Freebies and subsidies is crucial in that. Analysts say that TRS leaders, who have repeatedly commented on other states copying their own government plans, might use it politically now, but they must take responsibility for the state’s situation in the coming days. Free schemes are going on not only in Telangana but also in many other states. Criticisms have been voiced that the poor are not being brought up financially and are being restricted to the minimum necessities with excessive subsidies. Economists warn that if the situation continues to go on like this, Telangana might end up facing a similar fate to that of Sri Lanka.