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Tuesday, 19 December 2023

Debt and Social Welfare: Navigating Fiscal Challenges in the New Madhya Pradesh Government


The recent inauguration of Mohan Yadav as Chief Minister of Madhya Pradesh marks a significant shift from Shivraj Singh Chouhan's nearly two-decade-long leadership. While Chouhan still commands substantial popularity in the state, a realignment of interest groups and leaders is underway as the Bharatiya Janata Party (BJP) undergoes a leadership transition in Madhya Pradesh, Chhattisgarh, and Rajasthan.

Chouhan's extensive rally campaign, consisting of 165 rallies ahead of the polls, is credited for the BJP's massive majority. Paradoxically, this strength may compel the new Chief Minister, Mr. Yadav, to forge his own path. The BJP aims to consolidate its rainbow caste coalition in the state, with the notable exclusion of Muslims, through the leadership trio of Mr. Yadav (an OBC leader), Jagdish Devda (an SC leader), and Rajendra Shukla (a Brahmin leader). The government's early decision to increase the Tendu patta collection rate aligns with its tribal outreach, a promise outlined in its manifesto. The BJP anticipates that this consolidation will resonate in neighboring Hindi-belt states.

In Madhya Pradesh, where OBCs constitute over 50% of the population, SCs make up about 17%, and Brahmins hold influence in the Vindhya region, the BJP's social engineering takes a new leap with Mr. Yadav's appointment, especially considering the relatively reserved response of the Yadavs to the BJP's overtures toward OBCs.

The new government faces immediate challenges, particularly in fulfilling campaign promises such as enhancing the Ladli Behna Scheme, which currently provides ₹1,250 per month to 1.31 crore women from poor households. The BJP, under Mr. Chouhan, pledged to incrementally raise this amount to ₹3,000, but Mr. Yadav's stance on this commitment remains uncertain. Additionally, the party promised to increase the support prices of wheat and paddy crops and provide LPG cylinders at ₹450 to beneficiaries of the Ladli Behna Scheme and the central PM Ujjwala scheme.

However, these welfare commitments come at a time when the state's exchequer is burdened by heavy debt, estimated to be close to ₹4 lakh crore due to loans acquired by previous governments. The BJP's ambitious social engineering, coupled with expanding welfare schemes, is anticipated to impose additional strains on both the social fabric and economic resources of the state. Managing these challenges effectively will be crucial for the new government's success in balancing its fiscal responsibilities with its commitment to social welfare

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