Govt to spend lakh crore before elections - Fusion - WeRIndia

Government to spend ₹1 lakh crore before elections

Government to spend ₹1 lakh crore before elections

As the general elections are ahead, Modi government wants to spend ₹1 lakh crore for various programs to attract common public.

These include farm loan waivers, massive rallies, flying sea-planes etc.

A report on Reuters stated that huge expenses would be borne by the government for the sake of elections.

It also stated that these expenses probably delay plans to reduce the budget deficit.

The interim budget will be presented on February 1. In this budget, several attractive programs are likely to be announced especially for the farmers.

Already government had announced job reservations and policies to promote SMEs.

Government is mulling to introduce various attractive programs. One such program is direct transfer of money to the banks accounts of farmers. Providing interest free loans is another plan.

Modi government is planning to introduce these programs before the announcement of election dates and enforcement of Model Code of Conduct.

Earlier in the week, Gopal Krishna Agarwal, the BJP’s economic affairs spokesman said that the party favored an expansionary economic policy to address the issues of farmers.

Some government sources revealed that interest free loans for farmers would cost ₹12,000 crore a year. The loans will be given by the State Bank Group. Yet, the interest has to be compensated by the government which is a huge amount.

Yet, this amount is not sufficient for the implementation of other attractive schemes as per the sources. The government would need another ₹40,000 crore for different schemes to be implemented.

The government would lose a revenue worth ₹25,000 crore due to personal and commercial tax concessions. The reduction in the GST rate would also lead to a revenue loss of ₹13,000 crore per year.

On the top of that the government is considering the option of giving ₹2,000 to ₹4,000 per hectare to land-owning farmers which alone could cost more than ₹1 lakh crore.

Though it is costly, it is effective to attract the public.

If this option is chosen by the government, it may not consider other options like interest free loans.

However, it was not confirmed by the officials of the government.

Image credit: Image by Shameer Pk from Pixabay (Free for commercial use)

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