Schemes good, need good governance

The principal Opposition Telugu Desam openly criticises Chief Minister Y.S. Jagan Mohan Reddy for what it terms the “complete neglect” of industry and infra sectors, while his own partymen wonder under their breath if “overdoing” the welfare initiatives will leave state finances in such a bad shape that there will not be adequate funding for the ‘Navaratnalu’, the nine welfare initiatives, down the line.

Chief Minister Y.S. Jagan Mohan Reddy, while building his image as messiah of the poor hasn’t done much to counter the narrative of his critics that he is anti-development. Some political analysts have even taken exception to what they describe as “misrule.”

“The welfare initiatives of Mr Jagan Mohan Reddy are undoubtedly good but they will yield results only when there is good governance,” says Prof. K. Nageshwar, noted political analyst. For instance, the Amma Vodi scheme is aimed at encouraging mothers to send their children to school by compensating them for the loss of their wages with a financial assistance of Rs 15,000 per annum.

“It is equally important to impart quality education in schools that have all basic amenities,” points out Prof. Nageshwar. On the agriculture front, merely handing out Rs 13,500 per annum under the Rythu Bharosa scheme will prove counter-productive in the absence of a climate that is conducive to making agriculture viable, he says adding that the Chief Minister’s focus should be equally on creating economic activity. He found fault with “politics of vengeance” pursued by the Chief Minister.

The initial days of Mr Jagan Mohan Reddy’s tenure were marred by a setback to the construction sector, a major area of economic activity, due to the stoppage of sand supply. Then came the suspension of all irrigation project works, revisiting of power purchase agreements (PPAs), rumours over the relocation of KIA Motors and, above all, the proposal of dividing the capital between Visakhapat-nam, Amaravati and Kurnool.

“Higher capital expenditure is an indication of a healthy economy but that is completely missing. On the contrary, the revenue expenditure is high and increasing,” says former finance minister and senior TD leader Yanamala Ramakrishnudu. The annual salary bill of Rs 8,000 crore on so-called volunteers is a sheer waste as it is nothing but doling out a cash incentive to YSR Congress workers, he alleges. The government’s finance managers have a different story. Countering the TD argument, Chief Minister’s special secretary Krishna Duvvuri says: “We are left with a legacy that is better explained in statistics — enhanced debt of Rs 2.58 lakh crore from Rs 97,000 crore in 2014 and unpaid bills of Rs 70,000 crore.”

The power sector was the worst hit during the TD’s rule, he said adding that the liabilities went up from Rs 21,000 crore in 2014 to Rs 70,000 crore in 2019. In the same period, arrears payable by the power utilities to producers went from Rs 2,500 crore to Rs 21,000 crore. “Does clearing bills of Rs 20,000 crore by us in the last eight months not amount to prudent financial management,” Mr Duvvuri asks.

Defending the revisiting of PPAs, the special secretary said the previous government had entered into agreements to purchase power at a higher cost of Rs 5 or more per unit when it is available at Rs 2.50. “While the Centre and industry may look from the perspective of the government not honouring the previous agreement, we are worried over the future of the power utilities,” he points out.

The government also attributes financial stress in the state to the general recession as reflected in a mere 1.22 per cent growth in tax revenues and 4.5 per cent GDP growth. The GDP growth rate reached 4.5 per cent because of the 14.5-per cent increase in government spending, without which the actual growth would have been 3.3 per cent. While hoping for the revival of the economy, the finance managers are confident that prudent spending would help sustenance. “The Chandrababu Naidu government borrowed Rs 5,000 crore through the Civil Supplies Corporation before the elections and spent the money on his Pasupu Kumkuma poll sop. This is unremunerative expenditure,” said Mr Duvvuri.

He does not mention that the YSRC government also doled out a sop in the form of the Amma Vodi scheme just before Sankranti in January. Even ruling party MLAs admitted that a majority of women beneficiaries spent the money on buying clothes for the family members, just as they did with Pasupu Kumkuma incentive.