The secret behind success of Chhattisgarh's welfare schemes

I have often been asked that how Chhattisgarh manages the contradictory pulls of sound fiscal health and welfare schemes. How did we manage to roll out the food and nutrition security to not just the neediest ones among us but to almost the entire population of a state that has had a history of malnutrition and neglect, without jeopardizing Chhattisgarh’s finances?

As finance minister for the last eight years, I have learnt the lesson that a state needs to be fiscally robust to run welfare schemes. The central Food Security Act of 2013 may create a financial crisis for India. But Chhattisgarh has implemented the Act at a cost of 1.4% of the gross state domestic product (GSDP) and has managed to contain its fiscal deficit within the fiscally prudent ceiling of 3% of GSDP.

Better Money Manager
After successive studies of state finances, the Reserve Bank of India (RBI) has ranked Chhattisgarh among the top three best-performing states on critical fiscal parameters and management.

During the last decade, it has maintained fiscal discipline, including sustainable debt management. The economic and fiscal indicators of Chhattisgarh have consistently been better than most other states. The annual growth rate during the 11th Plan has been 8.4 per cent compared to the 7.9 per cent average for all states.

On the fiscal side, the ratio of revenue receipts, state’s own tax revenue, debt, interest payment as well as fiscal deficit to GSDP has been significantly better than the national average. In fact, Chhattisgarh has the lowest debt-GSDP ratio among the states.

Similarly, the ratio of interest payment to revenue receipts, a measure of debt sustainability, has been the lowest for Chhattisgarh (4.5 per cent in 2011-12).

Better Plan Manager
Chhattisgarh’s overall fiscal management has also been far more prudent and efficient if you compare it with the Centre. For example, while the debt stock to GDP ratio of the Centre has ballooned to 40 per cent, Chhattisgarh’s outstanding liability is pegged at 17 per cent. Similarly, the ratio of revenue receipts to GDP of the Centre, at 9 per cent, is less than half that of Chhattisgarh.

On Plan expenditure, the ratio to GDP for the Centre is almost one-third to that of Chhattisgarh and, yet, the outgo towards interest payment is 35 per cent of GDP compared to 3 per cent of GSDP for Chhattisgarh. Productive resource allocation has been the focus of our overall growth strategy. Accordingly, the annual Plan outlay has grown nearly 10 times during the last decade and 60 per cent of the Plan expenditure is funded from state’s own resources, the highest for any state in the country. Besides, social sector expenditure as percentage of total expenditure at 49 per cent is the highest in India.

In the economic sector, there has been substantial investment in agriculture and allied activities. Consequently, the annual growth rate in agriculture during the 11th Plan as well as the first year of the 12th Plan has been more than double the national average. In spite of the economical slowdown, Industrial growth rate has far exceeded the national average. This would have been better but for the policy paralysis of the Centre particularly in the core sector.

Food and nutrition security, health and skill development have remained the centrepiece or our efforts. We are the first and only state to have Food and Nutrition Security Act, Right to Skill Development Act and a Universal Health Insurance Scheme.

Better Food Manager
In many ways, the Chhattisgarh Right to Food and Nutrition Act is far more progressive and inclusive compared to the central Act. It guarantees nutrition security, whereas the central Act is limited to food grain. The state Act covers nearly 90 per cent of households compared to 67.1 per cent under the central Act. Similarly, the state Act provides for 35 kg of food grain per household whereas in the central Act, the entitlement is 5kg per person. Considering the national average of five persons per household the average works out to be only 25 kg per household. We are giving rice at Rs 1 and Rs 2 per kg as against Rs 3 per kg from the central government.

Compared to the central schemes that provide health insurance for poor, Universal Health Insurance Scheme, which was introduced in Chhattisgarh in 2012, guarantees insurance coverage up to Rs 30,000 for all.

The state government has enacted the Right to Skill Development Act with a view to providing training in a skill of choice to every youth within 90 days of application.

Chhattisgarh is among the first states to have expanded the scope of NREGA by guaranteeing an additional 50 days of employment, to be funded by the state.
We have made it gender sensitive as well, with maternity benefit of one month’s wage for women job-cardholders.

We have managed to repair not just bodies but souls. We have outgrown the adage of roti, kapda aur makaan. That bridge has been crossed. We are now looking at ensuring better health, gainful employment, a risk-and debt-free secure future, and also at remaining fiscally responsive.

The writer is chief minister of Chhattisgarh