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Informist, Monday, Aug 19, 2024

 

By Krity Ambey

 

NEW DELHI – To woo the rural voters, the Bharatiya Janata Party-led government in Haryana has timed the roll-out of its new housing scheme for rural areas--Mukhya Mantri Gramin Awas Yojana--right before the announcement of the state Assembly election, scheduled to take place on Oct 1. Just two days before the poll panel announced the election schedule last week, the Haryana government started the online portal to take applications from beneficiaries for the housing scheme.

 

The Haryana government had announced the rural housing scheme in its Budget for 2024-25 (Apr-Mar). Under the scheme, the government led by Chief Minister Nayab Singh Saini aims to provide plots to beneficiaries from rural areas who have an annual family income of less than 180,000 rupees.

 

The state government has set a deadline of Sep 30, a day before the voting for the state Assembly elections, to provide plots to 25,000 beneficiaries. In case the government fails to allot a plot to any family by Sep 30, it will provide a benefit of up to 100,000 rupees to them under the rural housing scheme.

 

The scheme covers those beneficiaries who are not covered under the Centre's Pradhan Mantri Awas Yojana. The state government has also been running a housing scheme for urban areas since last year. Haryana has allocated 4.30 bln rupees in the current year's Budget for the state-run housing schemes. 

 

The BJP government's attempt to please the rural population is not surprising given that there is discontent among farmers in the aftermath of the Centre's three farm laws. The controversial farm laws--Farmers' Produce Trade and Commerce (Promotion and Facilitation) Act, 2020, Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Act, 2020, and the Essential Commodities (Amendment) Act, 2020--were repealed in November 2021 following a year-long protest by farmers.

 

It is fair for the Haryana government to focus on the rural population as it comprises a larger chunk of the state's population, said Jagdeep Chhokar, co-founder of Association for Democratic Reforms and retired professor of the Indian Institute of Management, Ahmedabad. "However, the voters may consider what the government has done in the past five years over the last-minute measures," Chhokar told Informist.

 

Besides the housing scheme, the state government has also announced a waiver for interest and penalty on crop loans. About 70% of Haryana's population resides in rural areas, as per the 2011 census. 

 

"It is a tendency of each government to spend more on social welfare measures right before the election," Madan Sabnavis, chief economist of Bank of Baroda, said. "The way I look at it, does it distort the overall fiscal numbers of the state? Unlikely," Sabnavis said.

 

With a total expenditure of 1.56 trln rupees, Haryana has projected a fiscal deficit of 2.77% of gross state domestic product for the current financial year ending March. This is well within the Centre's mandate to states to keep the fiscal deficit below 3.50% of GSDP. 

 

After the 2019 Haryana Assembly poll, the state's fiscal deficit had expanded by only six basis points to 2.88% of GSDP in 2019-20, from the revised estimate of 2.82% of GSDP for the year.

 

However, the state may miss its capital expenditure target for the year on account of these measures, India Ratings and Research Senior Economic Analyst Parsa Jarsai said. Haryana has set a capital expenditure target of 216.75 bln rupees for 2024-25, that accounts for 13.9% of the total expenditure.

 

In 2019-20, the year of the last Assembly election, Haryana missed its capital expenditure target by 14.68 bln rupees. The state's revenue deficit had expanded by 28 bps to 2.04% of GSDP in 2019-20.

 

In the current year, the state's revenue deficit is projected to expand to 1.47% of GSDP from the revised estimate of 1.20% for 2023-24. All fiscal parameters, excluding the revenue deficit, have been brought within the limits prescribed by the Fifteenth Finance Commission, according to the state government Budget documents. 

 

"From a fiscal position, it is a state with a recurring revenue deficit. They have to bring their revenue deficit within the Finance Commission's recommendation," Jarsai said. The Fifteenth Finance Commission has recommended states to bring down their revenue deficit below 1% of GSDP by 2025-26. 

 

The BJP is hoping to retain power in Haryana for the third consecutive term. In the previous Assembly elections, BJP emerged as the single-largest party with 40 seats, six seats short of a majority in the 90-seat Assembly. The party formed the government in the state in alliance with the Jannayak Janta Party, which won 10 seats.

 

BJP has since parted ways with the JJP and contested the Lok Sabha elections earlier this year on its own. The BJP suffered a setback in the General Election, losing five out of the 10 Lok Sabha seats to the Congress. BJP has also appointed Nayab Singh Saini as chief minister after Manohar Lal Khattar resigned from the position in March. The political parties, including Congress and Aam Aadmi Party, are yet to announce chief ministerial candidates for the upcoming election. 

 

Unlike the Lok Sabha elections, the Congress and Aam Aadmi Party are fighting the Assembly elections separately. This will be the first real test for BJP, which managed to return to power at the Centre with a reduced majority in the Parliament elections earlier this year.  End 

 

Edited by Aditya Sakorkar

 

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