BJP must tread tight fiscal path to fulfill poll promises in Uttarakhand

Providing 24X7 power appears doable but road connectivity to every village seems challenging

Going into the Uttarakhand state elections, the Bharatiya Janata Party (BJP) manifesto made a bunch of promises. From road connectivity to all villages by 2019, to round-the-clock power supply to filling all government vacancies in the first six months of coming to power.

A closer look at some of these main promises suggests that while some are doable, others might prove difficult to fulfill.

Take rural roads. The BJP has promised constructing one to every village by 2019. From the record, a daunting task. In 2016-17, against a sanctioned road length of 1,664 km in the state under the Pradhan Mantri Gram Sadak Yojana (PMGSY), only 47 km have been completed. Since 2001, against a total road length sanctioned of 8,096 km, only 5,838 km has been built. According to the data put out by the rural works department of the state, of 91.9 km sanctioned in April 2015, only 4.1 km was completed; another 19.3 km was under construction.

"Constructing roads in hilly areas is difficult. Permission is sought from the forest department for land clearance and then the rocks are cut. The other challenge is the monsoon and winters, which leave only four months time for construction work," says Shailesh Bagoli, officer in-charge of rural roads.

He says a village is considered connected to a road under PMGSY scheme if its aerial distance from the nearest road is around 1.5 km. The state government had decided two years earlier to also construct the remaining 1.5 km of road. Under this project, around 150 km was to be built in two years; progress, as seen, has been slow.

Power

In contrast, the promise of round-the-clock power supply appears easier. The first step entails connecting all households to the power grid. Data from the Union power ministry shows of the 1.72 million rural households here, 1.5 million have electricity. In this aspect, Uttarakhand is better placed than most other states. Electrifying the remaining households is likely to easier to achieve than in, say, Uttar Pradesh.

On power distribution, too, central to achieving the Centre's promise of 24x7 power, Uttarakhand is better placed than other states. The state has joined the UDAY scheme for reforming state distribution companies' (discoms') finances. Unlike the others, it has not taken over any debt of its discoms, as they are in a better financial positon, says a study by CARE Ratings.

On the contentious issue of power pricing, too, it fares better than most. Data compiled by CARE shows in Uttarakhand the difference between average cost of supply (acs) and the average revenue realised (arr) per unit, a measure of how adequate power rates are to cover costs, is 27 p a unit. The national average is 59p a unit. Uttarakhand ranks fifth on the 16-state list on
the parameter in the CARE study.

However, the new government has much work to do on bringing down aggregate technical and commercial losses (AT&C). The state has one of the highest of such losses, at 29.3 per cent. Under UDAY, these are to be brought down to 15 per cent by 2019. A 14 percentage point decline in two years will be challenging, to say the least.

Education & pay

Another BJP poll promise was to provide free education up to the post-graduate level for economically weaker sections. The state's expenditure on education as a percentage of aggregate spending has consistently fallen over seven years, from 23.5 per cent in 2010-11 to 17.1 per cent (Budget Estimate) in 2016-17. So, the scope to raise spending on this does exist but would be a financial problem, when seen in conjunction with the promise to fill all government vacancies in the first six months.

In 2015-16, the state spent Rs 9,900 crores on wages and salaries, roughly 30 per cent of its total expenditure. And, more than its entire capital expenditure, Rs 6,954 crore. Any increase in the pay bill means a higher fiscal burden. Its fiscal deficit already exceeds the three per cent limit prescribed by the 14th Finance Commission. In 2016-17, the deficit was budgeted at 3.4 per cent of gross state domestic product (GSDP), up from three per cent in 2015-16 (revised estimate). If the new government does indeed decide to fill all vacancies, the wage bill would take resources that could be spent on education.
 

Series concludes