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Saturday, 17 September 2016 00:00
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Will it be roads or loan waivers in poll-bound UP?


On the face of things, roads minister Nitin Gadkari’s plan to lay foundation stones for one highway project every week in poll-bound Uttar Pradesh is the classic pre-poll rhetoric politicians are known for—countless elections over the decades have seen a flurry of foundation stones being laid with great fanfare, only to turn into tombstones for projects that never came up. As part of the ambitious Rs 130,000-crore plan for new projects to be completed before the central government’s term is over—and there’s another Rs 60,000 crore of projects already in progress across the state—Gadkari and home minister Rajnath Singh were in the state for a bhoomi poojan on Friday. While rolling out the projects will take time—on average, it takes 2-3 years to complete a large road project—Gadkari’s hope is that the jobs created till the time the elections begin, and the start of the construction work, will convince Uttar Pradesh’s electorate that the BJP means business. Keep in mind that, under Gadkari, the pace of road construction has increased from 12.5 kilometers per day to 20 kilometers, even if the FY17-end target of 40 kilometres looks very steep. A big step taken a few weeks ago, to speed up the pace of road construction, was the Cabinet approval to pay 75% of the award upfront in case arbitration panels ruled in favour of the private developer in fights between them and various government departments—this move alone will give an estimated Rs 70,000 crore to the cash-strapped industry.

The question now is whether development will be the BJP’s main poll agenda or will this be combined with other largesse such as waiver of farm loans. Icrier professor and well-known agriculture expert Ashok Gulati’s work has shown that while every million rupees spent on fertiliser subsidies reduced the number of poor by 24, the reduction was 335 for investments in building roads and 323 for agricultural R&D, but every politician feels that money going to the poor is a bigger—and more immediate—draw with the electorate. That is why one of the first steps taken by Tamil Nadu chief minister J Jayalalithaa after being re-elected was to waive Rs 6,000 crore worth of farm loans; in poll-bound Punjab and Uttar Pradesh, other politicians are promising variants of the same. While the BJP could end up doing much the same partly due to competitive pressures—the BJP, after all, passed the UPA’s populist food security and land acquisition Acts for this very reason—it would do well to keep in mind that, at a mere 8% of GDP, Uttar Pradesh’s own tax revenues can’t pay for such largesse—the state’s fiscal deficit is 2.9% of GSDP, debt at 30.1% of GSDP and overall tax revenues are growing at just 11.7% over the past five years. More important, the BJP’s poll promises will show whether the party believes in its own rhetoric of development over sops.



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