Karnataka gameplan: Congress' 5 guarantees to cost Rs 45,000 crore a year

The Axis My India exit poll found that the Congress received 11 % more votes from women in Karnataka than the BJP

The Congress government in Karnataka estimates an annual expenditure of Rs 45,000 crore to implement its “five guarantees”. Its calculation suggests the guarantees will help increase the annual income of an average family living outside Bengaluru by Rs 55,000, a rise of 25 per cent over its current per-capita income.

According to Congress Research Department Chairman M V Rajeev Gowda, the Karnataka guarantees will help offset effects of inflation and income stagnation, especially for families living outside Bengaluru. According to the Economic Survey, the per-capita income outside of Bengaluru is Rs 1.5-2.5 lakh. “Consider a family of four with an income of Rs 2 lakh and one diploma-holding youth looking for a job. This family will get ₹24,000 a year through Gruha Lakshmi, ₹18,000 a year through Yuva Nidhi, foodgrains worth about ₹14,000 through Anna Bhagya, and save a few thousand rupees on their power bill under Gruha Jyoti. The benefit of around ₹55,000 from the five guarantees will boost this family’s income by over 25 per cent,” Gowda said.

The Axis My India exit poll found that the Congress received 11 per cent more votes from women in Karnataka than the BJP. Also, the CSDS-Lokniti post-poll analysis indicated that the rural poor voted in more significant numbers for the Congress than the BJP, and the party believes its “five guarantees”, three of which are women-centric, played a vital part. In Karnataka, the state Cabinet, in its first meeting on Saturday, approved the implementation of the five guarantees (see chart).

In Karnataka, the Congress’s women-centric schemes included a Rs 2,000 monthly stipend to the state’s estimated 13 million women heads of households. This Gruha Lakshmi scheme will cost the exchequer Rs 24,000 for each beneficiary and a total of Rs 31,200 crore annually. The free travel for women in state transport buses, Uchita Prayana, according to the party’s assessment, will cost it Rs 27 for each woman passenger daily, or 912.5 million passenger trips in a year, calculated on the assumption that 33 per cent of 7.5 million daily passengers on state transport buses are women. Similarly, based on CMIE data, it has estimated that 500,000 youth will be eligible for the Yuva Nidhi scheme. Under Anna Bhagya, 25 million beneficiaries will get 10 kg grains, with the state government purchasing 5 kg at Rs 30 per kilo for an annual cost of Rs 4,500 crore.

The Congress believes the guarantees will augment the declining or stagnating incomes and help rejuvenate the economy by boosting consumption. “Families that receive money during economic distress do not save it. Instead, they spend it on their daily necessities,” Gowda said.

The BJP’s IT cell chief Amit Malviya believes the five guarantees, once rolled out completely, will widen the fiscal deficit of Karnataka to Rs 1.14 lakh crore, or 4.8 per cent of its gross domestic product, up from Rs 60,582 crore or 2.6 per cent of the GSDP now. “One hopes the Congress doesn’t do a Rajasthan, MP or a Himachal in Karnataka and go back on its words, which won’t be surprising,” Malviya tweeted on May 15.

Congress strategists, however, also pointed to Finance Minister Nirmala Sihtaraman’s Budget speech, where she announced the extension of the 50-year interest-free loans to state governments by one year. “This will help fund Karnataka’s capital expenditures, thereby freeing up the state’s own tax revenues for fulfilling the Congress’s five guarantees,” Gowda said.

The Congress blueprint of guarantees, party strategists said, is consistent with Congress leader Rahul Gandhi’s conception of universal basic income. On March 25, 2019, Rahul, then president of the Congress, announced what he thought might be the gamechanger for the Lok Sabha polls — the Nyuntam Aay Yojana, or Nyay, that is justice for the poorest 20 per cent of India. The Congress failed to win the mandate to implement its universal basic income scheme of Rs 72,000 annually for the poor. But it has since rolled out similar schemes in the states it governs, and a promise likely to be the centrepiece of its manifesto for the 2024 Lok Sabha polls. It has already promised “five guarantees” for poll-bound Madhya Pradesh.