Today's youth yearn for good education, decent jobs, not freebies

India’s fractured mandate in the political arena is costing taxpayers dearly. With regional parties governing more than 50 per cent of the states and competing to be part of government formation after the next general election, state governments are showering largesse on voters.

The disturbing trend over the last several years has been the preference for non merit goods over merit goods. The result is mindless populism taking large scale precedence over social and infrastructure development.

Populism has always been part of democratic electoral politics in India. Indira Gandhi famously started it in 1971 with the ‘Garibi Hatao’ slogan. Later, actor turned politicians from South India set the trend in true filmy style. MG Ramachandran started the mid-day noon meal scheme in Tamil Nadu while NT Rama Rao started the Rs 2 per kg rice in Andhra Pradesh. Congress party followed it up at the Centre with first of the farm loan waiver in the 1980’s. And just before the 2009 general elections, they repeated the act to the tune of Rs 60,000 crore.

Freebie culture took a break at the start of liberalisation in 1991, when politicians increasingly began to focus on development. With high economic growth, coffers of Central and state governments grew rapidly. This enabled the governments to build infrastructure while simultaneously focussing on poverty eradication. But the start of the current decade proved to be an era of crony capitalism wherein greedy corporations and power hungry politicians adopted corrupt means to garner improper and disproportionate share of resources creating enormous inequality leading to a voter backlash. Apparently in a move to bridge the growing disparity and offer little crumbs to the poor, political parties brought populism back with a vengeance.

In the last ten years, the Congress led UPA has given away more than Rs 15 lakh crore in subsidies that has benefitted the rich and middle class more than the poor. Since it assumed office in 2004, subsidy bill has increased exponentially to almost eight times. Petroleum subsidies mostly benefitted the rich and middle class while rich farmers gained from fertiliser subsidy and lower interest rates. Food subsidy is mostly lost to middlemen while support to exporters accrued to big time corporations. The Central government, in trying to control the runaway expenditure, has sacrificed public investment, education and health sectors to foot this enormous subsidy bill.

With an eye on New Delhi, state governments too have been implementing subsidy schemes to gain credibility amongst voters. First action of several state chief ministers upon assuming office have been to sign executive orders to please the electorate with freebies. Even the Aam Aadmi Party (AAP) which was supposed to stand for a different kind of politics rewarded voters with water and electricity subsidy. The Congress government in Karnataka was quick to implement Rs 1 per kg rice and various other subsidized schemes for different communities.

Long-term damage

Chief ministers of Uttar Pradesh and Tamil Nadu ordered laptops on assuming office to be distributed to young voters. ‘Amma Unvagam’ – subsidised canteens of government of Tamil Nadu gives away food at very cheap rates. The Odisha government recently provided mobile phones to farmers as did the Bihar government. Both states want the Centre to accord special status that can replenish their depleted treasury. Punjab has its ‘dal-atta’ scheme while West Bengal has similar programme supplying rice at low prices.

Unfortunately, distributing freebies or subsidising non merit goods has proven to be a very costly social experiment and has failed to achieve desired outcomes. Although government figures point to a considerable reduction in poverty, people more than ever are malnourished and unable to afford basic necessities in life.

Education and health indicators do not favourably compare even with our neighbouring countries. Slums and ghettos are on the rise in most cities.

Moreover, populism is at loggerheads with an aspiring India. Most of today’s youngsters yearn for good education and decent paying jobs so that they can provide for themselves and their families. They want government to focus on providing better administration, reduce corruption, improve living conditions, increase the economic pie and ease rules for starting a business, so young entrepreneurs can
incubate their ideas and thrive. Regrettably power-hungry politicians are indulging in gimmickry to win elections while wasting precious resources in the process.

Mindless and compulsive populism of our netas have led to shaky government
finances and runaway inflation. During the world economic crisis, Central government suspended the Fiscal Responsibility and Budget Management (FRBM) Act which became a licence to fiscal profligacy. Since then it has piled on more than Rs 20 lakh crore of debt on the country’s tax payers. And they have been indulging periodically in accounting skullduggery to keep deficits down. With political parties lacking big ideas and out of the box solutions to solve many of people’s problems, most of themhave taken the easy route to provide instant gratification to citizens at large without realising the long term damage to government finances and economic stability.

Populism of the kind practiced today is unsustainable in the long run and has the potential to wreck the economy and currency. A national movement, like the Anna Hazare anti-corruption movement, will indeed be required to restore sanity in political parties that can curtail inflation, spawn social development and strengthen government finances. Otherwise, an unavoidable economic crisis will surely force a corrective action.