The Budget for 2020-21 were more crucial for the five states — Assam, Bihar, West Bengal, Tamil Nadu and Kerala — that will hold Assembly elections within the next 12 months. Apart from the wide geographical variation, these states also represent wide variation in terms of the political parties ruling them — from the Left Front government in Kerala to the right-wing Bharatiya Janata Party in Assam. Not surprisingly, the Budgets clearly reflected the political priorities and the economic realities of each state. That is what explains the stark differences in the Budgets of not just Kerala and Assam but also Assam and Bihar (two states where the BJP is part of the government albeit with quite dissimilar levels of control).
As such, while Assam, where the BJP dominates the ruling coalition, saw a budget peppered with sops for specifically targeted sections of the society, Bihar, where it is the junior partner, witnessed a rather staid Budget with hardly any new scheme being announced.
Assam Budget is full of sops and freebies. For instance, in 2018-19, in the lead up to the Lok Sabha election, Assam government gave Rs 5,000 each to over 7 lakh tea garden workers — one of the disgruntled set of voters. In 2020-21, in the lead up to the Assembly polls, tea garden workers will receive Rs 3,000 each. Similarly, there appears to a conscious decision to woo women voters through one scheme or the other.
Assam could do it as it is the only state that saw its revenue receipts go up (by over Rs 9,000 crore) during the current financial year. Bihar’s uneventful Budget, in contrast, was a reflection of its economic realities. Of all the states analysed, Bihar faced the biggest compression of revenue receipts between BE and RE — over Rs 25,400 crore — in FY20. Yet, on paper, it hopes to achieve the biggest expansion in expenditure between BE and RE — over Rs 17,000 crore. But this has left its fiscal deficit at close to 10 per cent of its gross state domestic product — more than three-times the permissible limit. It is clear that Bihar will have to cut back its expenditure quite sharply in the January to March quarter to stay within the fiscal responsibility bounds.
Much like Assam (although not to the same extent), other states too have tried to come up with as many new initiatives as possible such as free electricity (WB), regularising residential encroachments on poramboke (unmeasured) lands (TN), and enhanced pensions (Kerala).
A crucial commonality among all these states is the high level of youth (15 to 29 years) unemployment — Kerala (36%), Assam (27%), Tamil Nadu (26%), Bihar (22%), and West Bengal (13%). Not surprisingly, all states, barring Bihar (where “jobs” did not find mention in the whole speech), initiated schemes to boost self-employment opportunities for the youth.
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