Fulfilling poll promises an arduous task for INDIA bloc in Jharkhand

The JMM-led INDIA bloc in Jharkhand had announced guarantees for the people of the state, including transfer payments, in its manifesto

The handsome victory of the Indian National Developmental Inclusive Alliance (INDIA) bloc, comprising the Jharkhand Mukti Morcha (JMM), the Congress, and others, over the National Democratic Alliance (NDA) in Jharkhand comes at a price — keeping the promises made in the election manifesto.

  The bloc came up with a collective manifesto comprising seven guarantees. They involved freebies and transfer payments.

  One of those guarantees included increasing the honorarium under the Mukhyamantri Maiya Samman Yojna (MMSY) from the existing Rs 1,000 to Rs 2,500 per month to eligible women aged 18 to 50. Earlier, the government had reduced the minimum age of women eligible under the scheme from 21 to 18. This also countered the Bharatiya Janata Party’s proposed Gogo Didi Yojana, which promised a monthly payment of Rs 2,100 to eligible women. Although this move is expected to benefit more than 5 million women, estimates suggest it is going to be costly, draining the state coffers of Rs 9,000 crore per year.

  Another of the poll promises by the INDIA bloc included providing LPG cylinders for just Rs 450. The JMM-led coalition promised to increase the ration from 5 kg to 7 kg a month for every person belonging to underprivileged sections.

Interestingly, the JMM’s own manifesto promised loan waivers for small and medium-level traders.

How are these to be financed?

Jharkhand generates only about 30.8 per cent of its revenue receipts from its own tax collection. The state’s pension scheme for the marginalised sections of society accentuates the problem because the state government supplements central pension amounts, contributing an additional Rs 240.40 crore to ensure all eligible individuals receive Rs 1,000 a month.

  Further, other committed revenue expenditure in the form of salaries and interest payments used up more than 33 per cent of revenue receipts, according to the Revised Estimates of FY24. This might constrain the Jharkhand government from investing in development activities, making the establishment of more colleges in blocks and district headquarters (one of their poll promises) a difficult proposition.

  Moreover, the debt-gross state domestic product (GSDP) ratio for Jharkhand has consistently remained high, exceeding 30 per cent in FY20 even before the pandemic started. It peaked at 36 per cent in the pandemic year of FY21. Government estimates show the ratio to be around 27 per cent in FY25, though a similar estimate last year was later revised to 30.6 per cent.  Jharkhand also ranks among the top 10 states with the highest debt-GSDP ratio, according to a Reserve Bank of India reporting 2022.

  Employment was one of the poll planks of these Assembly elections. Both the contesting blocs made it a point to include job creation as priority in their manifestos. While the BJP promised 500,000 jobs, for the INDIA bloc it was one million.

  The state does well in employment. The unemployment rate is 1.3 per cent in 2023-24 (July-June), according to the Periodic Labour Force Survey (PLFS). It has improved upon the 1.8 per cent in the previous year, and is significantly lower than the national average of around 3.2 per cent for 2023-24.

 

  The victorious bloc had announced an increase in minimum support price (MSP) for paddy from Rs 2,400 to Rs 3,200 per quintal and a 50 per cent raise in MSP for other agricultural products. Although beneficial for farmers, it might increase prices, particularly those of food and beverages.

  Although Jharkhand’s inflation of 4.02 per cent (in the first seven months of this financial year) is lower than the national average of 4.8 per cent, its food and beverage inflation

  rate shot up to 8.98 per cent in September and 9.85 per cent in October, surging ahead of the national food and beverage inflation rates of 8.36 per cent and 9.69 per cent, respectively. 

A rise in MSP can further accelerate food and beverage inflation.  

Considering Jharkhand ranks second in multidimensional poverty, according to a 2023 NITI Aayog report, the bloc would do well to keep its promises.