How Sheila Dikshit's fiscal prudence will help fund Kejriwal freebies

Sure, we all know the Aam Aadmi Party (AAP) is not planning on staying on in power for too long in Delhi. It is interested in getting a good start by fulfilling some of its promises in January, and will probably pick a fight with the Congress in February so that it can claim betrayal and try and emerge with a clear majority in the next Delhi election.

However, the intense media naysaying about AAP’s ability to fulfil its promises is wide off the mark. Like many others, I too believe AAP has made irresponsible promises on water and electricity and many other things, but that comes from my fears about promotion of a freebie culture. It does not mean AAP cannot fulfil at least some of its key promises quickly.

Given the robust balance-sheet of Delhi - for which Sheila Dikshit must be given due credit, especially when her party’s government at the centre has been busy bankrupting the exchequer - it is not beyond AAP’s ability to subsidise water and power supplies for a while. According to an Economic Times report today (26 December), Delhi runs a revenue surplus of Rs 9.713 crore - which means AAP has a lot of money to play with.

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The point is: if AAP wants to play populist, at least for now it will have the financial wherewithal to do so. It may not make long-term fiscal sense, but there is no doubting its ability to offer subsidised power or water if it wants to. In the short run, it can fulfil its promises by dipping into taxpayer funds.

[caption id=“attachment_1307559” align=“alignleft” width=“380”]  Sheila Dikshit and Arvind Kejriwal. IBN Live.[/caption]

A Financial Express report says that Delhi currently subsidises power to the tune of Rs 400 crore. But with a large revenue surplus, it is not beyond AAP’s capability to temporarily offer a higher subsidy even while waiting for a power tariff audit to bring tariffs down. This could take three months, but AAP is not planning on doing anything beyond February - when the model election code will kick in.

As for water, as the ex-officio chief of the Delhi Jal Board, Arvind Kejriwalcan order the delivery of more water before the elections by executive fiat. The opposition will come from the tanker lobby and corrupt bureaucrats, but Kejriwal will revel in this and use it to seek a clear majority.

Put another way, the Congress and BJP’s real concerns may be that Kejriwal may actually be seen to be delivering in the initial phase of his chief ministership.

The shouting and taunting that has begun from Congress and BJP benches is a bit premature for the simple reason that Kejriwal has not even taken the oath as Chief Minister. So to taunt him for not delivering or for being a charlatan is a bit thick.

The BJP critiques the AAP for taking the support of the Congress, but this criticism is unlikely to wash as AAP was manifestly reluctant to take up the offer earlier. It came into the picture only when BJP declined and the Congress offered support to keep BJP out and to take the sting out of popular anger against it.

The option of running a populist minority government for two months was there for the BJP too -but its leadership calculated that it was not worth the effort. I presume it was because it would have left the AAP in opposition, making it even more belligerent. Giving AAP opposition space was not worth the effort of forming a minority government, the BJP could have felt.

As for the Congress, its support to AAP has clearly not gone down well with its cadre, and hence the belligerent noises. But the top leadership apparently calculates that this support is vital to avoid early elections in Delhi. The Congress does not want Delhi elections before it knows which way the wind is blowing - though that is pretty obvious. The Congress needs time to allow people’s anger against the party to dissipate - and hence the support to AAP. The Congress gameplan will be to show that AAP can’t deliver, and play a dual role - formal support, and informal opposition. But this ploy may not work, for people are not fools.

The irony is this: Sheila Dikshit may have run a tight ship, thus enabling Kejriwal to use the cash buffer in the exchequer to prove he can deliver.