Economic
Highlights
New Delhi, 13 February 2015
AAP Promises
BIG DREAMS SANS REVENUE
By Shivaji Sarkar
Delhi votes the bizarre way. A high price-hit
people, despite fall in inflation statistics, believed that the moon promised
by Aam Admi Party would be delivered to them. It has a severe cost to the
exchequer. The promised water, power, schools, primary health centres (PHC), free
wi-fi, CCTV and pucca houses for
shanty dwellers would cost the Delhi government a minimum of Rs 40,000 crore a
year in addition to its annual budget of about Rs 40,000 crore.
The AAP, with the backing of the CPM
in its poll campaign and drafting of the manifesto, has pandered well to the
desires and disenchantment of the low-income group, who constitute over 60 per
cent of the city State’s population. Ironically, the CPM-ruled
States have not been able to do what it seeks AAP to do!
The promise of reduction to VAT
smacks of rejection of goods and services tax (GST), a move formulated by West Bengal’s former Left Front Finance Minister Asim Das
Gupta, who chaired the Central-government appointed committee. How would AAP
government fund the welfare schemes with reduced revenue?
AAP’s own team had calculated that
Delhi would have to shell out a subsidy of Rs 13,000 crore, nearly the city’s
total development expenditure, to ensure a flat 50 per cent cut for household
consuming up to 400 units, benefitting over 80 per cent consumers. This is what
Arvind Kejriwal had tried to do during his 49-day rule. It would cost a subsidy
of Rs 4,000 crore. And, what did he do? He paid Rs 1600 crore to the power
distribution companies from the SC-ST welfare funds for about three months’
supply.
AAP's Rs.4,000-crore subsidy
may hit construction of existing schools and hospitals. How would the State
fund new 500 schools and colleges? The AAP says it would get land free from Delhi villages. The Delhi land-holders, who
have voted against the dilution of the consent clause in the Land Acquisition
Act, would provide the land free!
Assuming that land would come
free, the construction of rudimentary paraphernalia for the schools even at a
modest Rs 5 crore per school would cost Rs 2500 crore. The salary of teachers,
administrative staff would cost a minimum of Rs 7 lakh per school – Rs 35 crore
a month, Rs 17500 crore a year. The AAP says it has a different model possibly
that of “shiksha mitra” (teacher
friend), very low-paid part-time contractual teachers appointed by many States.
Even that would cost at least half of the estimate.
Each of the promised 900 PHCs
requires land or space. Each PHC is presumed to have at least 5 persons to man,
including at least two doctors, a male and a female. Approximately, the salary
bill itself should be around Rs 5 lakh a month and modestly another Rs 5 lakh
for other expenses – total Rs 10 lakh a month, if it does not have to pay rent
and give medicines. It would cost Rs 90 crore a month or Rs 1080 crore a year.
Actual expenses would be almost triple or over Rs 3000 crore a year.
The cost of adding 20,000 beds
in hospitals even at Rs 1000 a bed would come to around Rs 200 crore initially
and the additional 40,000 manpower would cost at least Rs 2000 crore a year.
Water was another poll plank which the AAP has cashed in on. According
to Census 2011, about a quarter of the city's 1.30 crore population does not
get treated piped water. The party promises to provide 700 litres of water
daily to every household. Assuming a kilolitre of water costs Rs 5 to produce,
it would require Rs 94.5 lakh per day or Rs 340 crore a year.
Apart from the cost, Delhi
has a perennial problem of scarcity of water. Recall even the then Congress-ruled
Haryana and Delhi
fought bitterly over it. Optimum is coming from the Ganga
at Haridwar. Free water across the globe, it was found, leads to high wastage.
Add to this, the new Government’s ambitious plan of having Delhi’s own 6200 mw power
plant. Calculating at Rs 5 crore a mw, this would cost Rs 31,000 crore. Plus
there is a running cost of at least Rs 200 crore a month to pay its staff and
other administrative expenses. Since prices would be subsidised, 50 per cent of
all expenses on generation and other costs would have to be borne by the State.
Further, where would the plant be set up? Who will give the required land?
Besides, land is crucial also for giving people houses at their shanty
sites. It involves a number of agencies. The Delhi Government doesn’t own an
inch of land. How would it do it then? It will have to fight with the Union Urban
Development Ministry to fulfil its promises. Regularising unauthorised
colonies, which allegedly mushroomed under the patronage of politicians over
decades, will be another daunting task for AAP.
A wi-fi Delhi would require Rs 150 crore for
installation, according to AAP’s own estimates. It would be provided by some
private company funded by the Government. However, in reality, wi-fi is free
for 30 minutes only. Beyond that it would be chargeable. In addition, the 15 lakh CCTV cameras are to be linked to
wi-fi. Each camera would cost Rs 2000, says AAP. This means that another Rs 300
crore is required for installation. Now this would require 50,000 people.
Assuming a basic Rs 10,000 a month salary for each, the total annual cost comes
to Rs 600 crore.
However, there is a missing link. The
cost of massive data servers and a huge control room to monitor all the
surveillance is not part of the estimate. Monitoring and other administrative
cost would add to a minimum of Rs 12000 crore a year.
There are also costs for additional
street lights, proposed marshals to protect women in buses, over 50,000 toilets
in public spaces and 1.5 lakh toilets in slums. Modestly, it would be a burden
of at least Rs 20,000 crore. Recurring costs are not estimated. And, if Delhi police is transferred to the Delhi government, as demanded by AAP, an
additional Rs 4630 crore expenses would have to be borne. As of now, this cost is
borne by the Central government.
Promises are easy to make. Fulfilling it requires
hard cash, which Delhi
hardly has. Populism is fine but nobody has answers how these promises are to financed.
One only hopes it does not become a ding-dong political battle with the Centre.---INFA
(Copyright, India
News and Feature Alliance)
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