When manifestos become the new fiscal crisis

By Ravishankar Kalyanasundaram

It began, as such things often do, with a promise that sounded noble. In Bihar, the ruling alliance has announced that every family in the state will have one government job. The slogan rolls easily off campaign microphones; it feeds dreams in a state where unemployment sits stubbornly above 17 per cent and public payrolls already swallow a third of annual revenue.

But scratch beneath the applause, and the arithmetic is alarming. Bihar’s public debt has already crossed ₹3.8 lakh crore, its debt-to-GSDP ratio at 39 per cent—one of the worst among Indian states. Salaries, pensions and subsidies consume more than two-thirds of its revenue. The exchequer is stretched to the last rupee, yet the manifesto promises new jobs, cash stipends for women, farm waivers and free power. Each of these schemes carries a noble label—employment, empowerment, equality—but together they threaten to push the treasury from deficit to disaster.

And this is not just about Bihar. It is about the politics of illusion that now grips much of India—where welfarism has become a competitive sport and fiscal prudence, a political liability.

The contagion of populism

Karnataka, hailed as India’s tech powerhouse, has learnt this the hard way. The Gruha Lakshmi cash-transfer scheme and free-bus-ride programme for women cost nearly ₹40,000 crore a year—almost the entire capital budget for roads, schools and irrigation. Contractors haven’t been paid for months, road repairs crawl, and teachers whisper about delayed grants. The state that once prided itself on efficiency is now gasping under the weight of its own compassion.

In Tamil Nadu, the story is darker still. The state’s electricity board, TANGEDCO, is drowning under ₹1.8 lakh crore of debt after decades of free-power politics. Subsidised tariffs, non-payment from departments, and reluctance to reform have turned the grid into a fiscal black hole. The government borrows more each year to pay old dues, while public infrastructure—from buses to bridges—crumbles quietly.

Every free unit of electricity, every unearned stipend, every waived loan sounds like a step toward equality. Yet what it often buys is a state’s slow descent into insolvency.

The guardians who look away

And where are our constitutional sentinels in this unfolding drama?

The Comptroller and Auditor General, who once thundered about “presumptive losses” and “fiscal imprudence,” now issues polite reports years after the event. The Election Commission, which enforces campaign decorum with precision, shrugs at fiscal recklessness written into manifestos. The Finance Commission, born to balance equity with efficiency, continues to transfer funds to states that spend them not on capital creation but on cash giveaways. The RBI, which cautions against sub-national borrowing, is forced to watch as state debts balloon through off-budget loans and guarantees. Even the Supreme Court, custodian of constitutional morality, has chosen not to wade into the fiscal swamp.

Each institution performs its ritual—meetings, reports, guidelines—but none exercises the moral courage to ask: Where will this end?

The silence is not just bureaucratic; it is existential. For what is the meaning of “sovereign democracy” if its fiscal foundations are eroding in broad daylight?

The illusion of prosperity

Meanwhile, monthly GST bulletins proclaim record collections, as if these alone prove economic health. But this is a mirage. Revenues may rise, yet expenditures rise faster. States borrow not to build but to pay salaries and subsidies. The “golden rule” of public finance—borrow for investment, not consumption—has been quietly buried.

Debt is no longer seen as a burden but as a tool of political comfort. And so the illusion continues: as long as there is cash to distribute, there is applause to harvest.

The warning on the wall

The writing on the wall could not be clearer. Sri Lanka once wooed its electorate with subsidies, free fuel and government jobs; it ran out of foreign exchange before it ran out of promises. Greece, Spain and Italy are still paying the price of their “welfare decades.” The West’s inflationary hangover today is not from war or weather but from years of populist spending.

Are we walking the same road, smiling as we go?

India’s federal design gives its states enormous freedom but little accountability. A reckless state can destabilise the whole union, because when it defaults, the centre must rescue it. Yet public debate treats state budgets as local trivia, not national risk.

If the Bihar model of “jobs for every family” spreads—as populism always does—then fiscal collapse will not be a regional tragedy but a national contagion.

The politics of silence

Why then do voters cheer these promises knowing they are unsustainable? Because decades of poverty have made immediate relief more persuasive than future growth. Because politicians have trained citizens to expect the state as benefactor, not builder. Because the media finds spectacle easier to sell than spreadsheets.

The result is a moral inversion: prudence is mocked as parsimony, and recklessness as compassion. Those who warn of debt traps are labelled elitist; those who cause them are hailed as messiahs.

And so the dance continues—money flying from the treasury, crowds cheering, manifestos multiplying, and the republic watching, spellbound.

Who will bell the predator cat?

The predator cat here is not one party, one ideology, or one election—it is the hunger for votes that feeds on fiscal illusion. Every manifesto fattens it; every silence shelters it. And unless the guardians of our democracy—the institutions, the media, and the thinking citizen—find their voice again, the treasury will keep shrinking while expectations grow beyond measure.

Elections are meant to renew democracy, not exhaust its purse. Development is not the art of distributing cash but the craft of building capability. The time has come to ask a harder question: When a state lives beyond its means, who pays the price—the politician who spends or the citizen who inherits the debt?

If we remain unmindful of that answer, the next crisis will not come as surprise but as consequence. For history has already written its warning, not in fine print but in bold letters across the wall: when politics forgets arithmetic, nations forget stability.