The politics and economics of poll promises

It is important to consider whether the freebie culture is a political issue, an economic issue, or both. Equally important is whether election-driven giveaways constitute empowerment or allurement

A L I ChouguleUpdated: Thursday, November 17, 2022, 11:23 AM IST
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Representative Photo | File

In February 2019, when the Narendra Modi Government announced a Rs 6,000 gift to small and marginal farmers, a palliative rather than a cure for farm distress with an eye on the 2019 general elections, it was hailed as a political masterstroke. But when Opposition parties announce similar schemes ahead of assembly elections, they are called reckless freebies and questions are asked about their financial feasibility. That the BJP is following double standards in promising freebies is quite obvious from the fact that in the poll-bound Himachal Pradesh and Gujarat, it’s not only the Congress and Aam Aadmi Party that made promises of freebies to voters but also the BJP.

Whether freebies constitute welfare or a tool for votes has been at the forefront of political discourse since July when Prime Minister Narendra Modi referred to the same as “revadis”, triggering a bitter debate over the politics and feasibility of populist promises on the eve of elections. Whether this is yet another masterstroke by the Modi Government to stir up a debate on the issue of state finances under the guise of political freebies is difficult to say. But the debate has acquired serious dimensions with the Supreme Court and the Election Commission also joining the issue in questioning the rationale behind freebies.

While Mr Modi has been repeatedly raising apprehensions on the increasing tendency of Governments and political parties to promise freebies, it is important to consider whether the freebie culture is a political issue, an economic issue, or both. Equally important is whether election-driven giveaways constitute empowerment or allurement. The debate over freebies is contentious because there is no clear demarcation between a freebie and a welfare programme, considering that what is a freebie and what isn’t is subjective and open to interpretation. When the free ration scheme to 80 crore people — which has been extended twice — is considered a welfare measure, can free education and free healthcare for the poor be called freebies?

On August 23, while hearing a public interest litigation by advocate Ashwini Upadhyay, a BJP supporter, seeking action against political parties for promising freebies during elections, former Chief Justice of India N V Ramana highlighted the need to define whether a promise made by a politician was a “freebie” or a “welfare scheme”. On August 26, the Supreme Court referred the petition to a three-judge bench, which it said would look into the top court’s 2013 judgement on the issue. Interestingly, the Election Commission, in a U-turn to its earlier position that it will stay away from the freebies debate, has proposed that political parties making election promises will be required to provide authentic information to the voters to assess the financial viability of their promises.

The Aam Aadmi Party, while opposing a ban on political parties promising freebies, told the SC that “schemes for socio-economic welfare of deserving and disadvantaged masses cannot be described as freebies”. Other Opposition parties, including the Congress, are also of the view that “aid to poor cannot be called giveaways”. In AAP’s view Mr Upadhyay’s “plea clearly seeks judicial action against a particular model of economic development by exclusively targeting fiscal expenditure on socialist and welfarist measures for the masses”, while ignoring the “vast fiscal losses to the exchequer caused by tax rebates, subsidies and other such freebies to big industries and businesses by the Centre and various state Governments”.

This is a fair point, considering that when industries and businesses are given tax rebates and subsidies or their loans are written off, not many eyebrows are raised. But when farmers are promised loan waivers to deal with farm distress, they are called freebies and dubbed as fiscally disastrous. Similarly, when the Centre gives incentives to stimulate private investment, no questions are asked as to where the money will come from. This raises an important question: in an unequal society like India, should the burden of improving fiscal health of a nation or state be imposed solely on the underprivileged masses?

Given that India is still a mixed economy with a system that combines both welfarist and capitalist models of development, it is unfair to see aid to the poor as freebies, while low interest rates for corporates to get cheap loans or a sop of cutting corporate taxes are seen as prudent policy decisions. Blaming socialism for India’s poverty, and by extension the freebies, is a result of three decades of operating within the dominant discourse of market capitalism. Therefore, instead of focusing mainly on the so-called freebies, the real debate should be how to improve the lives of the poor and the marginalised, how to invest in education and healthcare and how to generate more revenue for states.

There is no denying that the dire fiscal situation of states is a very serious issue that requires urgent attention and remedial measures through financial actions. While the high frequency of elections in India provides opportunities to political parties to indulge in competitive electoral promises, freebies alone are not the reason for the deterioration in the financial situation of states. Political parties are justified in saying that they have the right to project their policies and economic and political priorities before voters.

Seen from a welfare point of view, not all freebies are unjustified. But when the argument is framed as freebies versus fiscal stability, it is easier to look at all freebies as unjustifiable and fiscally unsustainable. The bigger question is: why do political parties need to promise sops to the poor before every election? The answer lies in the failure of our economic policies to create decent livelihoods for a vast majority of Indians.

The writer is a senior independent Mumbai-based journalist. He tweets at @ali_chougule

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