Chief Minister Bhupinder Singh Hooda had successfully met his first major political challenge when the Congress failed to secure a majority in the prematurely held Haryana Assembly elections when it secured only 40 of the Assembly's 90 seats. Hooda first lured the five Independents by offering them ministerial berths and with their support formed the government. Then he managed the induction into the Congress of five of the Haryana Janhit Congress (Bhajan Lal)'s six MLAs increasing his party's own tally to 45 members.

Now the ruling party faces two new political challenges: Ellenabad by-election and expansion of the ministry. The outcome of Ellenabad by-poll the date of which is yet to be announced will have wider political implications. The seat which was vacated by former Chief Minister and Indian National Lok Dal's chief Om Parkash Chautala who preferred to retain Uchana Kalan where he defeated former Finance Minister Birender Singh, is Chautala's stronghold. INLD may field Chautala's second son Abhay Singh in the by-election.

Ellenabad will be a prestigious fight as the by-poll's outcome will be politically crucial for both the ruling party and the INLD. If Abhey wins, it will further strengthen the stranglehold of dynastic politics in Haryana as Om Parkash Chautala and his other son Ajay Singh are already members of the Assembly. Besides, a victory will boost the morale of the Chautalas who were able to win 31 seats against the nine the INLD won in 2005. According to Akali Dal sources, Chautalas were reportedly in low spirits before the polls about their electoral prospects. Their impressive win, sources said, was made possible mainly by their morale boosting by family friend Punjab Chief Minister Parkash Singh Badal who along with his son Sukhbir Singh campaigned to garner Haryana Sikhs support for INLD. In case INLD wins Ellenabad, it may trigger realignments among the state's non-Congress parties. Already there are indications that some parties -particularly the BJP- opposed both to the Congress and the INLD may lend overt or covert support to INLD in the by-election.

On the other hand, a Congress victory will boost the image of Hooda and the ruling party which was dented because of the party's failure to win a majority even after the grant of generous sops and claims about the state's fast development during its previous regime. If, however, the ruling party fails to win Ellenabad, its image would suffer a further blow and Hooda will have to face not only the opposition's onslaught but also of his detractors in the ruling party.

The other political challenge the ruling party faces is how to accommodate, in view of limited vacancies in the ministry, the claims for ministerial offices not only of many of its own prominent aspirants but also of those who had quit their mother parties to join the Congress before and after the polls. It will be an arduous task for Hooda and the party's central leadership. The claims to ministerial berths by some of the aspirants who were members of the outgoing Hooda ministry but against whom there are complaints of opposing their own party candidates may, however, be rejected. Cabinet expansion will be a tricky exercise as it will have the potential of creating political instability, a not so infrequent phenomenon in Haryana.

The challenge government faces on the economic front is more formidable. The Hooda government when it first came to power in 2005 had inherited large surpluses from its predecessor Chautala government. But these surpluses started quickly depleting as soon after assuming power the government went on a generous doles granting spree. Two years ago when I pointed out to the then (now retired) Financial Commissioner (Finance) S.P. Sharma about the serious consequences of the government's generous sops on the state's financial health, he confined himself to saying that “for the present the situation is manageable”.

Two factors are responsible for the financial crunch the government currently faces. One is the previous Hooda-led government's generosity in giving freebies and sops. The other is the huge burden of implementing the Sixth Pay Commission's recommendations.

No doubt, some of the huge doles were meant to provide the much-needed social welfare measures. But these were also intended to woo voters. These did contribute to considerably soften the anti-incumbency sentiment which a government these days starts facing not long after coming to power. Had there been a strong anti-incumbency wave before the polls, the Congress's tally would have been much lower than 40 seats.

The extent of the present financial crunch created by such measures can be gauged from the fact that the state's debt which was Rs.20,000 crore last year is going to mount to Rs.30,000 crore by this year end. This will increase the government's interest liability. Besides the adverse effect of the slowing down of tax revenue partly due to the recession, some other factors including the imminent phasing out of the Central Sales Tax with the Goods and Services Tax (GST) estimated to be Rs.300 crore annually may also further aggravate the financial crunch.

These factors have already forced the government to take tough economy measures which have started with ordering a five percent cut in the non-Plan expenditure. Hooda will have to curtail, if not give up, his doles-granting generosity as practised during his first term and go in for mobilizing additional resources which would entail taxation measures. These are bound to have adverse political implications. The ruling party's present five-year term can act as a cushion to ward of any adverse effects if its leadership follows judicious political and economic policies. (IPA Service)