The budget last week drew high praise for eschewing populism in the midst of the poll season. However, the release of the election manifesto by the ruling party suggests a complete disconnect in the economic approach of the government and the next governments in five states. The BJP charter has all the characteristics of an opposition party trying to woo the electorate on populist promises. It has promised free electricity, two free LPG cylinders and 20 million smartphones/tablets in UP. A party that tried to push contentious agricultural reforms has doubled down on impracticable schemes in states. In Punjab, it has promised guaranteed MSP for fruits and vegetables and those default freebie options, loan waivers and free electricity. The problem is that irrespective of which party wins the elections, state budgets will have to accommodate these Alice in wonderland schemes which would ultimately lead to a debt trap and extra burden on honest taxpayers, after all the netas won’t be providing anything from their own pockets. The states would also have to cut back on public investment and capital expenditure which create an enabling environment for economic growth, and, consequently, jobs which are the most effective form of inclusion that was the premise of the fiscal document in the first place. The BJP itself is undermining its own budget and the economic progress of the nation. They haven’t done one thing right after assuming office.
