Feasibility of freebies
POLITICAL parties have no qualms about promising all kinds of freebies to voters in the run-up to elections, even if the state’s coffers are empty or highly depleted. With the freebies coming under the Supreme Court’s close scrutiny, the Election Commission (EC) has proposed that the Model Code of Conduct be amended so that all parties can be asked to apprise the electorate of the financial viability of their poll promises. The EC has noted that the high frequency of elections in India provides opportunities to the parties to indulge in competitive electoral promises ‘without having to spell out their financial implications, more particularly on committed expenditure.’
Even as PM Modi has repeatedly derided the politics of freebies as ‘revdi culture’, the Aam Aadmi Party (AAP) is of the view that governments should spend the taxpayers’ money to provide facilities to people. Undoubtedly, the promise of freebies such as providing 300 units of electricity free of cost per month to domestic consumers helped AAP storm to power in Punjab earlier this year. However, election-centric sops deny a level playing field to the stakeholders as the ruling party can afford to splurge — at the cost of the overstretched exchequer. The distribution of free food kits powered the ruling Left Democratic Front to an emphatic victory in the 2021 Kerala Assembly elections, in stark contrast to the rout it had suffered in the Lok Sabha polls held two years earlier.
Unreasonable freebies need to be weeded out as they are taking a heavy toll on the states’ fiscal health. In a research report, the State Bank of India has suggested that the expenditure on populist welfare schemes should be capped at 1 per cent of the state’s GDP or 1 per cent of its own tax collection. The report has noted that freebies have exceeded 2 per cent of the Gross State Domestic Product for debt-ridden states such as Andhra Pradesh and Punjab. A financially feasible road map for fulfilling poll promises is the need of the hour to help voters make informed choices and deter irresponsible governments from living beyond their means.
