Shivraj Singh's Profligacy in Poll Year Brings Debt-Ridden MP to the Brink of Bankruptcy

The debt burden on the state is Rs 3.5 lakh crore and likely go up further before the notification for the assembly election is issued next month. Both the BJP and Congress, unmindful of state's financial situation, are promising the moon to the voters.

Madhya Pradesh chief minister Shivraj Singh Chouhan will inaugurate a 108-feet tall statue of Adi Shankaracharya at Omakareshwar on September 21.

Earlier, Prime Minister Narendra Modi was invited to unveil the statue, but he declined to come to Omakareshwar. Modi’s refusal despite the invitation evoked memories of the toppling of six statues of Saptrishi – seven celestial sages – installed as part of the Mahakal Lok corridor project developed on the premises of Mahakaleshwar temple in Ujjain due to strong winds in May this year. Modi inaugurated the Mahakal Lok corridor in October 2022 with great fanfare.

Also read: Fallen Statues, Loud Corruption Allegations: Will Madhya Pradesh BJP Survive This Storm?

Speculations are rife that Modi stayed away this time around because he did not want a repeat of the Ujjain embarrassment. The Congress had accused the Bharatiya Janata Party (BJP) government of massive corruption in the construction of the Mahakal corridor, prompting the state Lokayukta to initiate a probe into the allegations.

Damaged statues at Maha Kal Lok corridor in Ujjain, Madhya Pradesh. Photo: The Wire Hindi.

However, four days after the slated unveiling of the Adi Shankaracharya statue, Modi is scheduled to address a huge rally in Bhopal to mark the culmination of the BJP’s five Jan Ashirvad Yatras that was flagged off by three senior Union ministers from five corners of the state in the first week of this month.

The ‘Statue of Oneness’, costing Rs 2,400 crore, is dedicated to the eighth-century philosopher, an influential and revered figure in Hinduism. Omakareshwar is a temple town that houses one of the 12 Jyotirlingas dedicated to Lord Shiva. The state government is estimated to incur an expenditure of hundreds of crores on the two grand functions aimed to push the BJP’s Hindutva agenda for votes. The BJP has made massive preparations to mobilise 10 lakh party workers for the Prime Minister’s rally on September 25, which is also the birth anniversary of its ideologue Deen Dayal Upadhyay.

Dole-outs plus Hindutva

A corrosive combination of dole-outs and extravagant show of Hindutva is pushing the debt-ridden Madhya Pradesh government to the brink of bankruptcy, as it borrowed Rs 3,000 crore more as loan this month in two tranches to meet perilously mounting expenses owing to chief minister Chouhan’s seemingly interminable promises and announcements to the voters in the election year.

The debt burden on the state government has already risen to nearly Rs 3.5 lakh crore and likely go up further before the notification for the assembly election is issued next month. Far from worrying about the state’s scary financial health, chief minister Chouhan looks all too eager to splurge the taxpayer’s money to woo voters, even if it means further emptying the state exchequer.

If the huge financial implications of its promises to the voters are any indication, the Congress, the main challenger to the BJP, also does not look deterred by the dismal financial scenario either, as it too is offering dole-outs.

Seemingly unmindful of the disastrous impact on the state exchequer of the pre-poll sops, they have promised – and keep on promising – the BJP and the Congress are blithely competing with each other to woo the voters, as though they wield some magic wand whose spell will automatically salvage the financial condition of the Madhya Pradesh government.

While the assembly election in the state is still two months away, both parties have promised schemes totaling thousands of crores of rupees and they don’t look done with the promising spree yet. The “Revdi culture” in the state is in full play, notwithstanding its criticism by the BJP central leadership in the recent past.

Congress defends giveaways 

The Congress’s chief ministerial candidate Kamal Nath says the party will fulfill its promises by adopting necessary fiscal prudence which is sorely lacking in the BJP government. The Congress veteran is of the view that spending on welfare schemes is one thing and splurging on events is quite another. The Congress has already worked out the required arithmetic of raising funds to meet the expenses that will be incurred in fulfilling the party’s promises, if it comes to power, the Pradesh Congress Committee chief avers.

File photo of Kamal Nath. Photo: PTI

“Shivraj government is continuously pushing the state into the quagmire of debt. The government is blowing away the hard-earned public money on events, functions, self-promotion, and glorification,” he says.

According to the Congress veteran, the Chouhan government borrowed money liberally from financial institutions to fund big construction projects without ascertaining their viability and with the sole aim of awarding contracts to chief minister’s favourite contractors.

“BJP leaders prospered over the years in the ‘40% commission government’ from gobbling huge money as commission from big contractors in lieu of government contracts,” alleges Kamal Nath.

Also read: Central BJP Leadership Takes Control of Madhya Pradesh Campaign – and Has a Bumpy Road Ahead

Senior Congress leader Tarun Bhanot, who was the finance minister in Kamal Nath’s 15-month government, says during his 15-month government, the then chief minister initiated several reforms, and multiple revenue resources were created without putting any extra burden on citizens.

He alleges that the BJP government claims it borrowed loans from banks for the development of the people, while the situation is quite different.

“The debt during Digvijay Singh-led Congress government was at Rs 26,000 crore when the Congress chief minister demitted office, but now it has reached close to Rs 4 lakh crore, and the financial condition of the people in the state continues to worsen,” claims Bhanot.

State stares at bankruptcy?  

The brazenness with which chief minister Chouhan is pursuing the “revdi culture” has lent more credence to the speculation that this election might be his swan song. The BJP central leadership has already dropped strong hints that even if the party returns to power, Chouhan will not be repeated, given that he has already held the chief minister’s post since 2005.

Speculations are rife in the state – both within the BJP and out of it – that the chief minister’s pre-poll bonanzas to all sections of voters betray a sort of scorched earth policy – a military strategy that aims to destroy anything that might be useful to the enemy, which usually includes obvious weapons, transport vehicles, communication sites, and industrial resources.

The scorched earth policy might sound too incongruent or farfetched to describe the chief minister’s penchant for mercilessly dipping into exchequer but statistics seem to suggest this might be the case after all.

Debt burden on the Madhya Pradesh government has risen by over 12% in the last one year. This means every MP citizen has a debt of Rs 41, 000 on his or her head.

The per capita debt in MP was estimated at Rs 13,853 by the end of March 2016, compared to Rs 10,896 recorded in the financial year 2013-14.

Since April this year, the government has taken loans of around Rs 9,000 crore – including Rs 3,000 crore in September, Rs 2000 crore in May, and Rs 4,000 crore in June.

The government’s pre-poll announcements and schemes in the past few months are estimated to increase the expenditure of the MP government by at least 10% by the time the state election is announced.

The MP government’s average monthly expenses, now around Rs 22,000 crore, are likely to get close to Rs 25,000 crore due to a slew of pre-poll bonanzas.

Among the major heads of the increased expenditure, Ladli Behna Yojana alone will cause an extra burden of around Rs 1,500 crore per month. This estimate is for Rs 1,000 per targeted beneficiary and this could go up to three folds if the chief minister keeps his promise to raise the amount from Rs 1,000 to Rs 3,000.

The state budget has allocated Rs 8,000 crore for the Ladli Behana scheme for which close to Rs 1,500 crore is required every month.

The scheme has been launched to counter the similar one announced by the Congress which has offered a Rs 1,500 allowance to women if voted to power. The chief minister has promised to raise the amount from Rs 1,000 to Rs 3,000 in the future. There are 1.2 crore eligible candidates for the scheme in the state.

Doubling the honorarium of guest teachers up to Rs 50,000 per month will lead to a yearly expense of Rs 470 crore. The decision to give cooking gas refills to Ladli Behna and Ujjwala beneficiaries at Rs 450 per cylinder will likely cost the government Rs 100 crore per month.

Apart from this, the government has hiked the pay of Anganwadi workers from Rs 10,000 to Rs 13,000, doubled the honorarium of Rozgar Sahayaks (from Rs 9,000 to Rs 18,000) and tripled the honorarium of district panchayat president, vice-president, district president, vice-president and deputy sarpanch and panch.

The promise of e-scooters to meritorious students will cost Rs 135 crore and that of laptops for 78,000 students will cost Rs 196 crore.

Also, the government has brought contractual employees at par with regular government employees in salary and other facilities. This will have substantial financial implications.

With new promises being made almost every day and likely to continue till the model code of conduct comes into force next month, the strain on the state’s finances will continue to rise.

As per the state finance department, the overall debt of MP as on March 31, 2022 was Rs 2.95 lakh crore. State finance minister Jagdish Devra told the state assembly in June this year that from June 30, 2022 to February 1, 2023, the state government took a loan of Rs 16,000 crore in several installments.

Since then, the government has taken an additional loan of Rs 13,000 crore in several tranches and is planning to take more to meet the expenses that its please-all announcements in the election year have entailed.

Apart from women, the state allocated Rs 358 crore to expand and establish four temples: Devilok in Salkanpur, Ramlok in Orchha, Ravidas Samark in Sagar, and Divya Vanvasi Lok in Chitrakoot.  The cost of development of these temples has gone manifold from the budgetary allocation. For instance, the Ravidas temple in Sagar, whose Bhumi pujan was performed by the Prime Minister last month, is being constructed at a cost of Rs 100 crore.

The total cost of the temple expansion and construction projects and other assorted religious allurements – such as hiking honorarium of temple priests, free travel for pilgrim centres, freeing temple land from government control, etc – announced by the chief minister in recent months is estimated to be around Rs 5,000 crore.

Another source of major drain of the state exchequer is publicity of the government’s achievements in the media.

The BJP government had spent about Rs 753 crore on advertisements in print and electronic media during a period of 34 months preceding the assembly elections held in November 2018, the Legislative Assembly was told.

In the veritable media blitzkrieg in the run-up to the coming assembly election, the Chouhan government may have already spent many times more money on advertisements than it did in 2018. For over six months, not a day has passed without the MP government having occupied substantial space in print and electronic media to blow its trumpets. There is no accounting, of course, of the money it is spending on digital media and the personal gratification of journalists and social media influencers. Together, they form a strong support base for the BJP.

Rakesh Dixit is a Bhopal-based journalist.