Rise of freebie electoral politics

Poll-time vows The Planning Commission and the Supreme Court seek to regulate goodies

The Supreme Court’s direction to the Election Commission to frame guidelines to restrain political parties from promising freebies to voters, so as to maintain a level playing field during elections, is significant with Lok Sabha polls ahead.

It also endorses the Planning Commission’s view, so to speak, that states must eschew voter appeasement and focus on inclusive development. The Apex Court’s observation that nothing under Section 123 of The Representation of the People Act barred political parties from promising voters freebies in their manifestos, however, has set off a debate on how much of populism is in popular interest. A report...

For those political parties which unabashedly promise freebies in their election manifestos and governments which hardly think twice while announcing populist schemes, the Friday ruling by the Supreme Court to regulate such goodies may have come as a shocker.

This, coupled with the Planning Commission asking the states to exercise caution while doling out such goody schemes shows the extent to which the parties and the governments have gone to woo the people – or voters? – at great strain to the economy.

Here is a sampling of the freebies offered in the recent past by various state governments and political parties: After J Jayalalitha-led AIADMK in Tamil Nadu pioneered the free laptop and tablet scheme for students passing out of Classes 10 and 12, it was lapped up by governments of Uttar Pradesh, Gujarat, Rajasthan and Odisha; with Lok Sabha elections less than a year away, Andhra Pradesh and Odisha are announcing populist schemes at the drop of a hat such as free mobile phones for farmers, “free umbrella”, “free blanket” schemes, besides giving away free bicycles, helmets etc; Punjab is continuing the ‘atta-dal scheme’; West Bengal Chief Minister Mamata Banerjee introduced subsidised rice scheme in select districts while Karnataka emulated several other states in launching Re 1 a kg  rice for the poor and Rs 4 a litre milk procured from farmers besides waiver of loans availed by SC/STs, minorities and backward class people from their respective development corporations.

The fledgling Siddaramaiah government in Karnataka is also contemplating a “free shoes” scheme for students, on the lines of the one in vogue in Tamil Nadu.
While some of these schemes are a fulfillment of promises made by the respective ruling parties in their election manifestos before coming to power, others are mostly election season handouts which naturally attract criticism.

What perturbed the Apex Court was the influence that these announcements have on the electorate as it observed: “… (distribution of freebies) shakes the root of free and fair elections to a large degree." Thanks to the court, party election manifestos, for the first time, will come under the scrutiny of the Election Commission.

The Planning Commission has been advising the state governments from time to time to focus on building infrastructure aimed at inclusive development rather than choosing, what many call, discriminatory approach in launching `handout schemes’.
Even during the ongoing consultations with the states for finalising their annual Plan outlays, the Plan panel impressed upon them again though it did not want to admit the same. Speaking to Deccan Herald, Planning Commission secretary Sindhushree Khullar noted: “It is the prerogative of the states to spend the money in the manner they deem fit. We are not school teachers to advise the states which way they should spend their money.”

No doubt the states are given a free hand. Nor will any Plan panel official declare on record the contrary.

 Still, a recent Commission document said: “Of late, a number of States have been giving various tax concessions to please powerful lobbies in the society. These populist measures competitively practised by successive governments have created serious dents on the revenues of some of the States…The biggest loser will be the poor, the weakest, the underprivileged, in whose name many of the existing populist policies are often justified.” Going pragmatic, it added, “….it is unfair to expect that the political processes would be totally free from populism.”

Even the Reserve Bank of India seemed to be none too happy with the doles as its governor D Subba Rao observed in March this year, “.... it will be politically difficult to reverse these entitlement programmes, they are here to stay.”

NTR, a trendsetter

It was popular Telugu matinee idol and former Andhra Pradesh chief minister, the late N T Rama Rao, who pioneered populist schemes such as Rs 2 a kg rice in the 1980s, which steered his fledgling Telugu Desam party’s ride to power.

The cheap rice scheme, since then, began to find a permanent place in almost every political party’s manifesto in every state. In later years, DMK went a step ahead by gifting colour TV sets to voters.

The money that the governments spend on these populist schemes are whopping: TN will be spending Rs 10,200 crore on distributing 68 lakh laptops over five years from 2011; UP has earmarked Rs 19,058 crore (including Rs 1,418 crore for laptops and Rs 320 crore for tablets in the current fiscal; last year, it spent Rs 600 crore on free sarees for below poverty line women); Punjab has more than doubled the outlay for atta-dal scheme for the poor at Rs 16,213 crore in 2013-14 despite reports of a funds crunch; Karnataka CM Siddaramaiah, soon after being sworn into office, announced programmes worth over Rs 4000 crore; free mobile, helmet, blanket etc., are to cost the Odisha government over Rs 1,350 crore this year.

If states are charged of being reckless, the Centre is not far behind. In 2009, the Congress-led UPA government launched the rural job scheme guaranteeing 100 days work a year to the poor, allocating Rs 30,000 crore a year for the purpose. The just promulgated ordinance to implement the food security scheme is to cost the exchequer a staggering Rs 1,24,724 crore!

Burden on exchequer

Critics warn freebies cast a massive burden on the exchequer. Says independent economist Kunal Kumar Kundu: “It is fine to have populist schemes when growth is strong but not now when there is all-round pressure on the economy. Biggest challenge is how to match this expenditure with revenue but we do not have those revenues. Also, beneficiaries will get used to easy money; these schemes lead to increase in rural demand and inflation…”

The defence is just as strong. Says IAS officer-turned Lok Satta party MLA of Andhra Pradesh, Jayaprakash Narayan: “You may or may not agree on giving away freebies such as rice, reimbursements etc., but it is well within the provisions of governance. But freebies like colour TV, mixer and grinder, bicycles etc., are unrelated to governance practises and must be held violative of code of conduct.”

Narayan, who had moved the EC against TN parties’ promises, adds: “It should be made obligatory on the part of political parties to inform the EC where the money will come from to implement such schemes and if they will raise taxes, reduce allocation for these programmes once in power.”

K M Chandrasekhar, former cabinet secretary in the Union government and now vice chairman of the Kerala State Planning Board (KSPB), says the state’s welfare spending model was not freebie-driven.

“There are not many state-backed schemes that could even be called populist when compared with schemes in other states.” According to Khullar, it is not proper to use word “freebie", as it is absolutely the states' discretion to spend money the way they think fit.

It will be no surprise if the states take on the Planning Commission as it is their prerogative to allocate funds for schemes but the question is one of burdening the economy and inclusiveness. They also argue that all the populist schemes have social benefits attached to them as they help people and the economy alike since schemes like free laptops will benefit the companies manufacturing them. But it cannot also be denied that most of the populist programmes are unproductive, a huge burden on the economy leading to fiscal deficit, and lack social audit to assess their efficacy. With elections round the corner, the Apex Court ruling will surely be a damper for political parties’ spirits while making promises of goodies.

(With inputs from Annapurna Singh in Delhi, Sanjay Pandey in Lucknow, Abhay Kumar in Patna, Drimi Chaudhuri in Kolkata, S T Beuria in Bhubaneswar and R Krishnakumar in Thiruvananthapuram.)

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