11-03-2006, 08:01 AM
From Deccan Chronicle
<!--QuoteBegin-->QUOTE<!--QuoteEBegin--><b>Populist policies </b>Â
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Few economists will appreciate Chief Minister Y.S. Rajasekhar Reddyâs promise not to impose fresh taxes or to raise bus fares and power tariff till the end of his governmentâs term in 2009. Normally, any ruling party is reluctant to raise taxes or power tariff and bus fares. But such populism costs the State exchequer dearly, putting a strain on State finances by pushing up budgetary deficits and public debt.
Andhra Pradesh has witnessed this phenomenon since 1983 due to populist schemes and policies pursued by successive governments. Telugu Desam founder N.T. Rama Rao had started it all by implementing the Rs 2-a-kg rice and subsidised saree and dhoti scheme for the poor and power supply for farm sector at concessional rates.
These schemes became a drain on the Stateâs resources in the 1980s and resulted in substantial cuts in the plan outlays of the State. Again, while in the Opposition, NTR forced the Congress regime to impose a ban on arrack in the 1990s. He revived the Rs 2-a-kg scheme and clamped total prohibition on liquor in 1994, causing terrible strain on the State exchequer. His son-in-law and successor N. Chandrababu Naidu had no option but to raise the taxes, bus fares, power tariffs and subsidised rice price and partially lift prohibition to shore up State finances.
To regain power, the Congress promised free power to farm sector and waived farm power dues. Over the last two-and-a-half years, the present regime has been implementing free power scheme at enormous cost to the exchequer. The scheme was modified to exclude ârichâ farmers but it still covers 97 per cent of the farmers.
Finance minister K. Rosaiah has presented three âtax-freeâ budgets in a row.
There has been no hike in power tariffs for the fifth successive year. Bus fares have been raised only once in February 2006 by the present regime. Good monsoon and buoyancy of State taxes has helped the government tide over the burgeoning financial burden to some extent since 2004. <b>But the State cannot afford populism endlessly, as the Stateâs public debt has already soared to Rs 82,720 crore this year. </b>
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<!--QuoteBegin-->QUOTE<!--QuoteEBegin--><b>Populist policies </b>Â
 Â
Few economists will appreciate Chief Minister Y.S. Rajasekhar Reddyâs promise not to impose fresh taxes or to raise bus fares and power tariff till the end of his governmentâs term in 2009. Normally, any ruling party is reluctant to raise taxes or power tariff and bus fares. But such populism costs the State exchequer dearly, putting a strain on State finances by pushing up budgetary deficits and public debt.
Andhra Pradesh has witnessed this phenomenon since 1983 due to populist schemes and policies pursued by successive governments. Telugu Desam founder N.T. Rama Rao had started it all by implementing the Rs 2-a-kg rice and subsidised saree and dhoti scheme for the poor and power supply for farm sector at concessional rates.
These schemes became a drain on the Stateâs resources in the 1980s and resulted in substantial cuts in the plan outlays of the State. Again, while in the Opposition, NTR forced the Congress regime to impose a ban on arrack in the 1990s. He revived the Rs 2-a-kg scheme and clamped total prohibition on liquor in 1994, causing terrible strain on the State exchequer. His son-in-law and successor N. Chandrababu Naidu had no option but to raise the taxes, bus fares, power tariffs and subsidised rice price and partially lift prohibition to shore up State finances.
To regain power, the Congress promised free power to farm sector and waived farm power dues. Over the last two-and-a-half years, the present regime has been implementing free power scheme at enormous cost to the exchequer. The scheme was modified to exclude ârichâ farmers but it still covers 97 per cent of the farmers.
Finance minister K. Rosaiah has presented three âtax-freeâ budgets in a row.
There has been no hike in power tariffs for the fifth successive year. Bus fares have been raised only once in February 2006 by the present regime. Good monsoon and buoyancy of State taxes has helped the government tide over the burgeoning financial burden to some extent since 2004. <b>But the State cannot afford populism endlessly, as the Stateâs public debt has already soared to Rs 82,720 crore this year. </b>
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