MP: No Funds to Pay Salaries, State Announces Schemes of over Rs 3,000 Crore Ahead of Bypolls

Bhopal: Keeping an eye on crucial bypolls in 28 seats in Madhya Pradesh, Chief Minister Shivraj Singh Chouhan has announced a farm scheme and development projects worth Rs 3088.77 crore over the last one month.

From the Rs 4,000 worth of yearly assistance to 77 lakh farmers, to the Rs 781 crore for the 404-kms long Atal Expressway in the bypoll-bound Gwalior-Chambal region, and nearly Rs 8,000 crore worth of development, irrigation and water supply projects in poll-bound districts, the announcements have been aplenty. The CM also announced the opening of a medical college in Morena district during the election campaign.

At the time however, the state government has no funds to pay salaries to its employees and pensioners. “The salaries of thousands of contractual and permanent staffers of the Health Department, School Education Department, Panchayati Raj, Technical Education Department and others haven’t been paid for between three to four months,” said O.P. Katiyar, a member of the Class-3 Government Employee Association. He added that even those on the front-lines of the COVID-19 fight are being paid after a month’s delay. There is also discontentment among regular employees over non-payment of arrears and allowance.

Ramesh Rathore of the MP Government Employee Association said that even pensions of senior officials have been delayed. The misabandi pensioners’ pensions are being delayed by two months. “The Government has no funds for employees, but have crores to make poll promises,” he said. Recently, health workers had protested at JP Hospital in Bhopal over non-payment of stipends and salaries for months. Hospital staffers held a strike for days in Ashok Nagar district over non-payment of salaries for the last five months.

Economists and Industrialist Experts Raise Doubts

Economists and industrial experts from the state have raised serious doubts on the feasibility and implementation of the government’s recent announcements. They wonder how a state under more than Rs two lakh crores worth of debt, once which has borrowed Rs 14,500 crore in the current financial year and is struggling to pay its employees, including doctors, can fund schemes and projects worth Rs 3088.77 crore, aside from existing ones?

?In addition, against the Rs 8,596 crore GST revenue compensation to Madhya Pradesh for the current fiscal year, the Union Finance Ministry has given only Rs 2,600 crore to the state on August 28. During a video conference with Union Finance Minister Nirmala Sitharaman, her state counterpart Jagdish Devda urged the Centre to pay the remaining amount as soon as possible.

“The economic condition of the state is in bad shape, as per the recent Comptroller and Auditor General (CAG) report. Madhya Pradesh’s revenue has registered a slight decline and nearly Rs 6,000 crore worth of GST compensation is due before the Union Government,” said Ganesh Kawadia, Professor and Head at the School of Economics, Devi Ahilya University, Indore.

When asked about the bypoll promises made by CM Chouhan he said that “announcements prior to any election is a necessary evil of democracy. The politicians focus on short-term goals,” he said, adding that the announcements are made without any study of feasibility.

Dr. Amit Kundu, another senior economist, said that as a result of lesser revenues generated this year, MP has already slashed its budget by 12% for current fiscal year; the state has also taken on a loan of Rs 14,500 crore this year and spent a major chunk of the budget for waiving loans of 26 lakh farmers.

“A large chunk of the state’s budget will be for the repayment of massive loans, salaries and allowances of the employees and the farmers scheme,” Kundu said.

The former chief secretary of the state, S.C. Behar, also raised doubts, calling the proclamations “impractical”. “With the Centre with money to pay, the state is running on borrowed money. The state is faced with an unaccountable loss due to the lockdown too. In such a situation, it’s highly impractical to announce such a scheme because it is impossible to implement,” he said.

Gautam Kothari, president of the Pithampur Industrial Association, suspects that the Government will further delay the already delayed GST refunds to the industries.

“The GST refund is already delayed and it’s quite certain that the Government will delay the GST refunds this year as well, due to the fund crunch. It is a big blow to industries already coping with the lockdown. The government has yet to pay between Rs 1200 to Rs 1400 crore worth of GST refunds to the industries,” said Kothari.

Another industrialist, D.K. Jain said: “The debt, which was Rs 35,000 crore in 2003-04, has now surged to more than Rs two lakh crore in the last 16 years. A major share of the revenue is being consumed by the repayment of debt. Hence, the state government is trying to run the economy by increasing tax on liquor and petroleum products. However, it seems ineffective.”

Manish Rastogi, Principal Secretary, Madhya Pradesh Revenue Department said: “There is no question of non-implementation of projects announced by the Chief Minister during his recent visits. All the projects have been approved. Yes, the process of allocation of budgets to projects has been stopped because the model code of conduct is in place.”

When asked about the massive debt and the feasibility of the intended projects, he said, “We are well within our fiscal responsibility.”

Nevertheless, a senior official of State Planning Economic and Statics Department claimed that the Government has no fund and it’s entirely running on borrowed money of the Reserve Bank of India, yet the politicians are making tall claims. “This is a necessary evil to win elections,” he said requesting anonymity.

Preferred Farmers?

Based on the lines of the Pradhan Mantri Kisan Samman Nidhi (PMKSN) – in which farmers receive Rs 6,000 a year in three installments from the Centre – CM Chouhan, unveiled the Mukhyamantri Kisan Samman Nidhi, courtesy of which nearly 77 lakh farmers will receive Rs 4,000 each financial year in two installments.

The first installment of Rs 2,000 has been transferred into the accounts of 5.77 lakh farmers, the total amount being Rs 1,154 crore. “The remaining 71.23 farmers will receive the same in near future,” the CM said on September 26 while addressing the media in Bhopal.

However, due to the model code of conduct being in place, no money can be transferred before the election.State Congress spokesperson Abbas Hafiz Khan took a dig at the ruling party, saying the BJP government is “trying to bribe the farmers just before the bye-elections. It is why all the farmers who had received the first instalment of Rs 2,000 are from poll-bound districts.”

Although the Government had a list of 77 lakh farmers, it transferred money only to 5.77 lakh farmers, he added. The state needs Rs 3,088 crore to pay Rs 4,000 to 77 lakh farmers in the state.