“Over the years the politics of freebies has become an integral part of the electoral battles in India and the scenario was no different in the recentlyheld Assembly polls in five states,” said NK Singh, Chairman of the 15th Finance Commission, distinguishing freebies from “expenditure on the public good”.
The literal meaning of freebie is something that is given free of charge or cost. In the political parlance, it owes its origin to the American politics of 1920s: What is a freebie, whose money is it anyway? In India freebie politics is effectively electoral insurance paid for with the taxpayer’s money. What is a freebie depends on who is asking this, where and when. History shows that what is dubbed a freebie today morphs into an entitlement soon and a national programme a few years later.
Ironically, the mid-day meal schemes launched by former Madras chief minister K Kamraj, and later and expanded by MG Ramachandran in 1982, was first mocked by New Delhi, only to be adopted as a national programme a decade later.
Former Andhra Pradesh chief minister NT Rama Rao’s promise of rice at Rs 2 per kg is the original avatar of the current day National Food Security Programme. Telangana’s Rythu Bandhu and Odisha’s Kalia were the forerunners of the PM Kisan Samman Nidhi. The free medicines scheme launched in Tamil Nadu is the template for a national health scheme.
However, not every freebie evolves into an ideal. An instructive example of a freebie turning disastrous is the free power regime pioneered by the Akali Dal in the nineties and adopted as a basic policy by Delhi’s AAP Chief Minister Arvind Kejriwal.
The free power regime is a live threat to India’s energy and economic security. No revenue is collected for a fifth of the power distributed, and state discoms are losing over Rs 75,000 crore a year. Twenty-eight of them are making losses and owe generating entities over Rs 1.09 lakh crore.
Freebies are fashioned at the intersection of political and administrative compulsions to woo voters from islands of hostility and denial. Faced with inability to resolve issues haunting people, the political class leans on Robinhood politics and flyover economics — address the consequences even if causes remain unattended.
The rise in demand for MGNREGS for instance reflects the failure of states to improve the ecosystem for job creation. The necessity to corral the temptations of parties to roll out freebies is indisputable –given the fallout visible in the gaps in basic services of policing, education and health care. The cost of sops is beggaring state budgets. A recent note on state finances published by the RBI warns, “New sources of risks have emerged in the form of rising expenditure on non-merit freebies, expanding contingent liabilities, and the ballooning overdue of DISCOMs.”
States are well within their rights to induct new programmes but guardrails are needed to align spend of public monies with public purpose. This calls for fixing the gaps in design, execution and accountability. The Election Commission could mandate that poll manifestoes inform voters what is the problem being solved, what it will cost taxpayers and where the additional money will come from.
The Finance Commission could devise a mechanism to limit expenditure on populist schemes via the FRBM Act. A mandate for bi-annual outcome reports on schemes could enhance audit and public accountability. Clearly, the politics of freebies cannot be equated with politics of social welfare. Ending this requires eternal vigilance on the part of the voting class. Finally, the power to block or allow the march of freebies rests with the voters
