As Jagan banks on direct benefit schemes in AP, voters split. Anxiety over jobs, cost of living

While nearly everyone avails DBT schemes, not all are convinced these are helping society as overall economic activity in YSRCP-ruled state is low.

Vijayawada: Nagasarala and her husband Vijay, from the Padmasali weavers’ community in Andhra Pradesh, have seen a drastic decline in work and income since 2020 after the Covid pandemic struck. But they’ve been able to educate their son, and just about stay afloat — all thanks to a slew of direct benefit transfer (DBT) schemes introduced by the YSR Congress Party government.

Nagasarala’s family receives Rs 60,000 a year from the state government, directly transferred into her bank account. The various schemes range from fee reimbursements for her son’s education to an annual Rs 24,000 for her family’s loom.

The extensive DBT schemes have been a calling card for the ruling YSRCP, aiding its victory in municipal and local body elections in 2020 and 2021.

“I’ve given lots of schemes in the last five years. If you want any to be improved, please tell me,” Andhra Pradesh CM Jagan Mohan Reddy told the weavers’ community in Mangalagiri during his Memantha Sidham bus yatra across the state. “I’m not experienced like Chandrababu Naidu. But I’m living in people’s hearts. My aim is changing the life standards of the people.”

The YSRCP government has been disbursing targeted schemes across most sections of society — like the YSR Nethanna Nestham scheme for weavers, like the one availed for the loom by Nagasarala. Lawyers, fishermen, autorickshaw drivers, hawkers are other beneficiaries.

Some of the more popular schemes include YSR Amma Vodi, a direct transfer into mother’s accounts for school-going children, and YSR Vidya Deevena, a fee reimbursement scheme for undergraduate students — once again deposited into their mothers’ account.

Nagasarala has been able to educate her 16-year-old son Devi Prasad under the Amma Vodi scheme. His father, Vijay, says proudly that he doesn’t know the first thing about handloom weaving — their aim is to send their son Devi Prasad to an engineering college so he can move out of Andhra Pradesh. There are no jobs for him in the state, they believe.

A loom at one of the several units in the hinterland of Andhra Pradesh | Vandana Menon | ThePrint

“It’s good that the government is giving money, but our main livelihood is affected. When there is no sustainable work, what is the point of this money? It’s not enough for anything. Everything is expensive so we are anyway living without much,” she says, listing lower wages, less work, and rising prices of raw materials as having affected the family’s income.

“My only hope is that my son will study well and get a good job so we don’t have to depend on Jagananna.” She pauses for a moment. “Or, the next government.”

“Where has the change come? That is exactly my question,” says Vijay.

The state elections in Andhra Pradesh have polarised voters, and while Jagan is banking on the welfare schemes to help his party’s chances, voters across coastal Andhra seem split along the welfare agenda.

Voting will take place 13 May and results will be out 4 June.

While nearly everyone avails DBT schemes, not everyone is convinced the schemes are helping society as overall economic activity in the state is low.

“DBT in isolation doesn’t work,” says Nara Lokesh, general secretary of the Telugu Desam Party, adding that Jagan’s government has racked up debt to fuel DBT, which has resulted in higher inflation, adversely affecting the poor. Cost of power, essential commodities, fuel, gas, etc have gone up substantially, he adds.

“DBT is a tool to support the poor, but it must be delivered alongside the creation of jobs and economic activity. The fruits of development must field DBT, not debt,” says Lokesh.

The ‘Jagananna’ factor

Families like Nagasarala’s, who live in the coastal town of Chirala, have benefited hugely from such schemes. Notwithstanding the YSCRP’s intention, there remains an overall anxiety over job creation and a rising cost of living — a problem that people expect the state government to tackle. 

The YSRCP, according to Jagan, has transferred a staggering amount of Rs 2.6 lakh crore into the bank accounts of beneficiaries in the last five years. In addition, Rs 1.7 lakh crore were spent on non-DBT schemes like loans, power subsidy, scholarships, and the public distribution of rice.

“The political intention behind such schemes is to consolidate Jagan Mohan Reddy’s political base amongst the poor,” says political scientist Anji Reddy, a professor at Nagarjuna University. “It’s the first phase of his political consolidation.” 

“The allegation is that Jagan is concentrating on welfare populism at the cost of economic development — which is not really true.”  

He points to a recent Niti Aayog report that says poverty has come down 4.2 percent in 2023, declining from 6.06 percent in 2021 and 11.7 percent in 2015-16. 

The opposition TDP alleges that the huge expenditure is not worth the massive debt the state is accruing — but the party along with the JSP and the BJP has also promised to continue these welfare schemes, as well as new addons, if the coalition is elected to power. 

“I don’t know if people are less poor, but the government is definitely transferring money to our accounts,” says Rambabu, a 52-year-old farmer from Velugapodi. “And they want us to remember who is giving us the money — it’s all about Jagan!,” he laughs, pointing that almost all the schemes are branded as Jagan’s. 

Rambabu, a Khamma farmer who says he will vote for TDP, adds that the DBT schemes have influenced the Chandrababu Naidu-led party to also introduce welfare schemes, which is why he feels confident to vote for them.

The farmer is not convinced that transferring money directly to beneficiaries ensures its proper use — he has heard of his children’s friends using college fee reimbursements to drink and gamble, rather than attend class. 

“Such lapses are normal,” says political scientist Reddy. “But ultimately, no parent will misuse money at the cost of their child’s lives, especially in Andhra Pradesh, where aspirations are high. Even a humble peasant dreams of his child settling in the US. We’re finding the wrong answers to the right questions.” 

Financing state’s welfare

While the YSRCP has forced its rival to also offer welfare schemes, the TDP has been raising questions about how the government has been financing the DBT schemes.

Quoting the CAG findings, the TDP alleged that the government has been raising a daily debt of R. 257 crore every day since April 2023. It also alleged that according to RBI estimates, Andhra Pradesh’s total debt will reach Rs. 4.85 lakh crore by the end of the current fiscal. In December 2023, the government cited the RBI’s report on state finances and pegged the total outstanding liabilities at Rs. 4.28 lakh crore as of March 2023. 

In March last year, India’s Economic Affairs Secretary Ajay Seth, however, pointed out that DBT schemes have helped the government save money — roughly $27 billion has been saved in key central government schemes. 

While welfare schemes have always been a mechanism to help the poor, DBT schemes offer a more targeted way to directly transfer money and cut out the middleman. Pensions, for example, are a DBT scheme, setting them apart from welfare policies like subsidies. 

Welfare vs DBT

Kayalu Sreenivas, a driver in Vijayawada, is skeptical of the government’s “free schemes,” as he calls them. The first thing he did after buying a new Swift Dzire in February — which he drives as a taxi — was apply for the YSR Vahana Mitra scheme. But he is yet to receive the money, and has now had the time to reflect on whether it’s worth it. 

The scheme promises Rs.10,000 per year to self-owned auto, taxi or maxi cab drivers, and is specifically intended to help with expenses related to taxi repair. 

“I am waiting for the money — yes it might disappear overnight, but it is still what the government owes us. My real worry is what is the point of the scheme when petrol and diesel prices are so high?” 

But Sreenivas points to a crucial fine print: electricity consumption in his household should be less than 300 units, or else he won’t be eligible for Vahana Mitra. His home, shared amongst 9 family members, struggles to keep electricity usage down. 

Such caveats are part of several schemes, making it difficult for families to rely on the consistency of the DBT. 

Another such scheme is the YSR Pension Kanuka, under which single women are eligible for Rs 3,000 a month. But to avail it, single women must be staying alone — a living arrangement that many elderly unmarried women may not have. 

Similarly, the popular Amma Vodi scheme can only be used for one child in the household. 

There are many who caution that such DBT schemes create undue dependence on the state and robs people of upward mobility by requiring them to stay within a certain socioeconomic strata or constrains their living standards. 

“Welfare schemes are different from just transferring money directly — that is something that should take place if there is a calamity or emergency,” says trade union leader Macherla Mohan Rao. “Unnecessarily tempting hard workers with free money destroys the chain of supply and command. These are purely vote bank schemes meant to keep workers dependent on one particular government.”

(Edited by Tony Rai)