Kejriwal's Economic Model Is The Road To Bankruptcy

by Ujjawal Mishra - Aug 11, 2022 07:26 PM +05:30 IST
Kejriwal's Economic Model Is The Road To BankruptcyDelhi Chief Minister Arvind Kejriwal.

Arvind Kejriwal seems to harbour dreams of making it to the top of the political totem pole when he has nothing more than “freebies” to offer as his political USP.

Lofty goals: Kejriwal was lifted by the anti-corruption movement and catapulted as the Chief Minister of Delhi for want of better alternatives.

Now, he wants to expand to nine more states, and one can assume that he will use Delhi’s ample resources to propel his party.

Kejriwal's freebie debate: The Supreme Court recently expressed concerns about the deteriorating economic health of states due to freebies.

Kejriwal is right to say in the apex court that the courts ought not to intervene in deciding which freebies can be distributed and to whom.

There's more to it: But he is being too clever by half.

  • He has sought to define freebies as subsidies only on education and health, but these subsidies can be justified anywhere, since these are public goods.

  • What he has missed out is the emphasis on universal free water and electricity, without restricting them only to the poor, in Delhi. These are non-merit subsidies and can only lead to wastage of state resources.

  • What is free will always be overused and wasted.

Punjab's dire economic health is about to get a lot worse if the AAP government delivers on its promises.

  • Punjab Chief Minister Bhagwant Singh Mann has launched a probe into the government’s massive debt.

  • Clearly, he is looking for someone else to blame for his problems. Kejriwal has no solutions here.

  • The reason is simple — what you can do in rich Delhi, you cannot easily do in poorer states, unless you make a choice about shifting resources from bad freebies to good ones.

Devastating economic model: If Kejriwal applies the same to expand to nine new states, he will be pushing these states towards bankruptcy.

No replicable model: The Kejriwal model can sell snake oil using state resources.

  • He wants us to believe that what can be done in Delhi can be done elsewhere.

  • Delhi has huge tax resources, but its costs are much lower than other states, as many of the bills are paid by the Union government.

  • As the CAG noted in a recent report, Delhi is revenue-surplus because the pension liabilities and policing costs are borne by the centre.

Advertising maven: The Kejriwal model is to spend unlimited amounts on advertising himself, using resources from five Delhi corporations.

Media's silence over Kejriwal's economics of short-term gratification is due to his shrewd understanding of media interest.

Delhi is always the centre of coverage, and thus his initial win in Delhi enabled him to gain more national traction and coverage.

Doomsday predictions have already been made in a recent RBI report about the dangerous debt-to-GDP levels of Indian states.

  • Kejriwal's arrival in the power structures there cannot be good news.

  • It's a good thing that the PM has started a discussion on 'Revdi culture'.

  • Kejriwal must answer.

Ujjawal Mishra is a Staff Writer at Swarajya. He tweets @Ujjawal1Mishra.
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