The Supreme Court only recently expressed concern about the election related ‘freebie’ culture. Experts are also wary about the impact giveaways can have on the economy. All this does not seem to have made any impression on political parties and their leaders.
It has been reported, in this context, that following the implementation of pay revision commissions’ recommendations in Telangana, the salaries of senior sweepers in power utilities has gone up to as much as Rs 2 lakhs a month, and that of chief engineers to Rs 7 lakhs a month. The impact of this on the state’s overall fiscal situation is reportedly being absorbed by the state’s increased revenues, but the profitability of power utilities remains challenged.
The question arises whether salary hikes should be in accordance with a corporation’s actual profitability structure, or be independently arrived at through considerations such as built in hikes. Does what a worker contribute not have anything to do with the salary paid, or is it some sort of a social welfare programme? It must not be forgotten that profits are not just for sharing – they have to pay for future modernisation and growth plans.
Another shocker that has come to notice is the election promise made by the BJP to the youth of West Bengal between the ages of 18 and 35 of an unemployment allowance amounting to Rs 25,000 per month. This is more like an unemployment incentive scheme because, instead of providing relief, it will encourage them to live off the amount rather than work hard to qualify for jobs. How good is that for a state that already has a greatly stressed financial situation and a stagnant industrial sector? This offer is likely to instigate counter-offers from the ruling TMC and other contending parties to raise the ante to even more unsustainable levels.
And, of course, all of this being paid for by the taxpayers, most of whom have to face the reality of making a living in the actual economy. The owner of small industrial or retail units have to manage every paisa to break even, while paying all sorts of taxes. Government expenditure in unproductive ways increases inflationary pressure and drop in purchasing power. In the larger context, unavailability of affordable labour will incentivize medium and large scale industries, particularly, to go in for further automation. This and many other factors should be taken into consideration before political parties start fooling around with the fundamentals of economics.
