Populism goes crazy with free electricity, old pension scheme

Recently in the run-up to the Uttar Pradesh Assembly elections, CM aspirant Akhilesh Yadav promised 300 units of free electricity for all if his party came to power. This made the BJP promise free electricity for all farmers to ween the voters away from SP. On Monday, Madhya Pradesh Chief Minister Shivraj Singh Chouhan said that his government has decided to waive electricity bills to the tune of Rs 6,400 Cr for the benefit of over 88 lakh domestic consumers. This came because lakhs of consumers didn’t pay the bills because they were told by the previous Congress government (which fell in March 2020) that they would be waived 

In many States, electricity is supplied at subsidized costs to several sections of customers. The AAP government in Punjab, like in Delhi, is going to offer free electricity to the residents under specified conditions. This is going to ruin the power sector in state after state, analysts say. 

A new populist scheme is also in the works. Already, the Rajasthan and Chattisgarh governments have brought back the Old Pension Scheme for government employees. Akhilesh Yadav in UP had promised the same, which is why most of the government employees voted for his party in the recent Assembly elections. The introduction of the OPS will ruin state finances like anything. 

Hindustan Times has reported that the state governments of Kerala, Andhra Pradesh and Assam have formed committees on the OPS. Kerala’s Pinarayi Vijayan and AP’s Jaganmohan Reddy are populists who don’t mind much about the health of state finances anyways. 

The good part is that There is no proposal in the Modi government to scrap the New Pension Scheme, which was introduced by PM Vajpayee in his term.