Revanth Reddy faces internal, external challenges as he takes over as Telangana CM
Keeping the poll promises will be a daunting task as a back-of-the-envelope calculation of the money needed to keep them raises questions about their sustainability when public debt has been rising
Revanth Reddy, 54, faces both internal and external challenges as he takes over as the Telangana chief minister after leading the Congress to victory in the southern state even as the party faced an electoral drubbing in Rajasthan, Chhattisgarh, and Madhya Pradesh.
The open lobbying for the chief minister’s post underscored the political challenge for Reddy despite Congress leadership’s backing for him over other contenders.
Keeping the poll promises will be a more daunting task as a back-of-the-envelope calculation of the money needed to keep them raises questions about their sustainability when public debt has been rising.
Six guarantees— ₹2,500 monthly allowance to women, cooking gas cylinders at ₹500, free travel for women in state transport buses, ₹15,000 per acre annually for farmers, and ₹12,000 to landless agricultural labourers—were the core of the Congress’s election campaign. They were inspired by similar pledges that helped the party return to power in neighbouring Karnataka.
The Congress has also pledged to write off crop loans of up to ₹2 lakh and to provide interest-free crop loans of up to ₹3 lakh in Telangana.
The other key promises include 200 units of electricity free to all households, ₹5 lakh assistance for homeless poor to build houses, ₹5 lakh for college or coaching fees, a monthly ₹4,000 pension to senior citizens, widows, and single women and rural employment guarantee wages of ₹350 daily.
The promise of an “annual job calendar with vacancies” by June 2, completing recruitment by September 17, filling 200,000 vacancies in the first year, and a monthly ₹4,000 allowance to unemployed youth also found traction.
Analyst and author K Ramesh Babu said there are nearly seven million farmers and keeping the promises made to them is alone likely to cost ₹10,500 crore. “...it [Congress] has also promised ₹500 bonus per quintal for paddy. The new chief minister will have to walk a tightrope to bear the burden of manifesto promises that appeal to farmers, women, youth, and weaker sections.”
Telangana’s liabilities were estimated to be 23.8% of the Gross State Domestic Product at the end of 2023-24. The previous Bharat Rashtra Samithi government almost fully exhausted the debt access limits, according to the Comptroller and Auditor General of India data.
The debt mobilisation target for 2023-24 is ₹38,234 crore. The state government mobilised ₹33,378 crore, amounting to 87.3% of the target, between April-October 2023, according to official data.
Telangana’s revenue generation has been much lower than the target for the year. According to this year’s budget, the revenue target was ₹2.16 lakh crore. But only 46% ( ₹99,755 crore) has been generated so far.
The state government has received about 50% of its share ( ₹14,528 crore) in the central taxes for the fiscal year.
Retired economics professor Abhinav Deshpande said it will be a major challenge to balance the revenues and the expenditure. “Without augmenting the revenue sources, it would be difficult to implement the poll promises.”
Experts have warned that indiscriminate populist promises could harm the country’s long-term growth prospects. Former Reserve Bank of India governor C Rangarajan has suggested enforcing strict fiscal limits to check freebies. Pronab Sen, a former National Statistical Commission chairman, has called for action against such promises.
Former bureaucrat N Jayaprakash Narayan, who is the founder of NGO Lok Satta focussed on democratic and political reforms, said it was not about one party. “...the general trend has been to focus on short-term rather than long-term benefits. There is a need to distinguish between freebies and welfare schemes resulting in asset creation.”
Narayan said the question is how to maintain financial discipline and balance welfare and development. “When people continue to take loans for regular expenses, their assets disappear; financial security is lost and their economy suffers,” Narayan said. He called for the establishment of an independent authority to decide on how to bring discipline in the implementation of welfare schemes.
Former Telangana Planning Board vice-chairman B Vinod Kumar dismissed the argument that freebies hurt the economy. “If pension employees receive after retirement is not considered a freebie, how can a welfare scheme for farmers be seen as a freebie? Most welfare programmes are designed to help the marginalised sections.”
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