BJP’s election manifesto will add over 2 percentage points to Haryana’s fiscal deficit: MC Analysis

Haryana win is not going to come cheap

Bharatiya Janata Party won a historic third term in Haryana on October 8, crossing the majority mark with 48 seats in the 90-member state assembly.

But the test for the party will begin now, as a Moneycontrol analysis shows that its poll promises are likely to add nearly 2 percentage points to the state’s fiscal deficit if implemented in earnest.

The real challenge for the party may, however, begin now.
A Moneycontrol analysis suggests that its poll promises will likely add nearly two percentage points to the fiscal deficit if implemented in earnest.

In his address to party workers after the win, Prime Minister Narendra Modi reiterated the government’s commitment to implement the Lado Lakshmi Yojana, which entails a monthly payment of Rs 2,100 to every woman in the state.
A Moneycontrol analysis shows that the state will likely incur Rs 21,942 crore for cash transfers to every woman in the 18-60 age group.

Add to this the guarantee of MSP on 24 crops, 2 lakh jobs for youth and an additional Rs 1,500 crore for LPG cylinders at Rs 500, and the cost will likely rise further.

The state’s fiscal deficit was pegged at Rs 33,635 crore or 2.8 percent of the GDP in the current fiscal.

The cost of just the income transfer and the LPG subsidy is expected to be 1.9 percent of the Budget.

A Moneycontrol analysis shows that the cost of promises is expected to be double the state’s excise revenue and nearly 60 percent of the state’s total expected GST revenues in the year.

However, the state would spend Rs 12,538 crore if it were to extend the benefit only to financially needy women.

The state will likely face a big jump in its salary bill as it fulfils its promise of adding 2 lakh government jobs over the next five years. Haryana has nearly 2.65 lakh employees on its payroll.

Salary expenditures are expected to be Rs 29,542 crore in FY25, an 11 percent increase over the previous fiscal year.

The addition of another 2 lakh employees will considerably increase the salary bill, which has already been rising over the last few years.

It can also depress the state’s ability to undertake more capital spending as its committed expenditure increases.