The populist measures of ‘Freebies' have infected the body- politic of this country without realising the far-reaching social, political and economical consequences. Following the queue from the AAP's gimmicks of populism, the Himachal Pradesh Chief Minister has announced that his government has decided to provide free power for up to 125 units from 1 July. He further offered a slew of measures that are often known as freebies in Indian Politics, like waiver of water bills in rural areas and a 50% discount on travelling in HRTC buses for women.
In Jammu Kashmir too, the newly formed Apni Party has recently promised similar types of freebies if they would come to power in the J&K Union Territory. In the past few decades, elections process in this country have undergone a transition from the crudest money and muscle to antics, gimmicks and punch lines characterising the campaign trails and consist of all ingredients of a political pot boiler.
A PIL has been moved before the Supreme Court to direct the political parties to restrict the promise of freebies in order to have money available for developmental schemes. The Supreme Court has admitted the petition and also commented that political parties should indicate how they will arrange the funds to fulfill the promises made by them in their manifestos.
Last week the Prime Minister held a meeting with Secretaries of various departments of Government of India in which amongst the feedback given by officers there was a consensus that promise of freebies should be avoided otherwise they put unnecessary strain on the public finances and can lead to unsustainable deficits. It is true that prudent public finance management needs to ascertain the resources and allocate them to items of expenditure that would lead to a faster rate of growth for the economy. Expenditure on physical infrastructure like roads, energy or irrigation leads to creation of an environment that is conducive for private investment to flow into the manufacturing and services sector contributing to higher momentum of growth. It has also become increasingly clear that development of human capital is essential to bring about all round development of the economy and accordingly the taxpayers money is best spent on social sectors like education and health. Various committees have been set up from time to time by the Government of India and State Governments to evaluate the public expenditure and to indicate the road map for future expenditure targeting.
Freebies are not good economics but they often happen to be good politics as they become important reasons for a political party to get elected. Ultimately, politics is all about gaining political power and for that one has to win elections. There is no denying that in the long run good economics would be good politics as it would lead to greater employment and development. However, elections are very often fought on immediate issues and, therefore, the freebie culture has caught on. Political parties which do not have a chance of winning the elections promise the moon but the voter is aware that these are empty pronouncements and is not lured by them. It becomes a different matter when political parties who are serious contenders to form Government promise freebies because they will have to honour them on coming to power which could have a negative impact on the state finances.
It is advisable that any political party promising freebies in their manifesto must indicate from where they will get the resources to implement the promises if elected to power. The voter must be alert to ask these questions and be aware of the financial impact on promises being made. In reality this is generally not true and freebies do help parties in getting votes and the voter does not go into the financial aspects. This is the prime reason why the political parties race against each other to promise freebies. It is also true that a freebie which has been given by one government is likely to continue as no other government will be able to face the reaction if they propose to discontinue them. For example, many states promise free power to farmers. This leads to excess extraction of ground water and also continuation of traditional cropping patterns. However, this kind of free power is difficult for any new Government to remove as it would lead to their becoming unpopular.
Too much emphasis on subsidies and freebies does distort the financial position of the State. The criticality of financial prudence can only be overlooked if one is prepared to face a financial crisis like the Sri Lankan economy is facing today. However, every welfare measure in favor of the poor and underprivileged should not be construed as a freebie as the prime objective of the State is to look after the welfare of its citizens. There is a thin line between two but still one can distinguish between a genuinely inclusive policy and an unnecessary and unwarranted freebie. The latter should be avoided but the former is essential for a welfare State.
