Recently Abhijit Banerjee, the Nobel-winning economist, suggested that the rich be taxed further through the imposition of a wealth tax on them. It may be argued that such ideas have not worked in most countries, but at least they were honest suggestions from a well-meaning individual concerned with augmenting the revenue of the state. That is why in days of crises, ideas such as these were deliberated upon and will continue to be debated in the future.
But, what about the expenditure side of government finances? It is high time a debate on it was restarted.
The man who has made the debate on government spending relevant again is Arvind Kejriwal, the charismatic chief minister of Delhi. Though his return to power has already been predicted by pre-poll surveys, he does not want to leave anything to chance. So, he has promised free bus rides for all students – rich and poor alike, upon his return to power. This is in consonance with his earlier decision of free bus rides for all women.
Such decisions and promises, raise a fundamental question: Is squandering away government revenue, by those who don’t need it, fair and just?
If bus rides are for general categories like ‘women’ or ‘students’, a large sum of money is bound to be wasted, for it would simply be like oiling one’s oiled hair. That is not all. There is also a sinister side to such freebies: When the rich are
There was a time when the self-styled, pro-poor Left regularly launched movements and called whenever the subsidy on petrol was reduced. But, the money for a subsidy does not fall from the skies. It is taxpayers’ money. So, the Left essentially wanted to put in the pockets of the car-owners a part of the taxes collected from the poorer segment of the population that does not own cars. It is tantamount to taxing the poor to help the rich.
Similarly, a part of the money for bus rides in Delhi will come from the poor. In other words, the money that could be spent on the uplift of the poorest of the poor will be spent for millions of the middle class, or even upper-middle-class women and students. Is it not unjust?
While talking about the of milking the poor for the benefit of the rich, it should be kept in mind that even the poorest of the poor pay taxes. It is not true that one who does not pay income tax does not contribute to the state exchequer. They GST for the goods or services they buy. So, there is no doubt that offering free bus rides to anyone who has the ability to buy it is a wastage of national resources that could have been used for the uplift of the lowest rung of society.
Such doles started a long time back when a majority of the people were poor, and the of socialistic equality clouded our eyes. In 1967, C N Annadurai, the founder of DMK, offered 4.5 kgs of rice for Re 1 (about Rs 40 of present-day value). But he failed to provide it for the state exchequer could not finance it. Now, when India has prospered and state exchequer is flush with money, the list of freebies in Tamil Nadu include , laptop, mixer-grinder, fans, livestock, and even gold for brides!
The Left made education free in Bengal after coming to power in 1977, and those who spent five hundred rupees a month for private tuition those days were spared ten rupees school fees. Soon, the freebie syndrome contaminated all places. One such reckless act is the farm loan waiver that temporarily helps the semi-rich and rich farmers while ignoring the poor. These poor farmers are not entertained by the banks, thereby forcing them to repay the local moneylender for whom the waiver is an alien concept.
Three prime ministers of our country (P V Narasimha Rao, A B Vajpayee and Manmohan Singh) fought this socialistic un-wisdom prevalent in the country, and the present PM is continuing their tradition. Meanwhile, S Subramaniam Balaji, a lawyer from Tamilnadu, the freebie culture through legal means, and compelled the Supreme Court to give direction (in 2013) to Election Commission of India to form guidelines on this. The Commission is, even after seven years, yet to come out with any such guideline.
So, even in 2020, Kejriwal or anyone else is free to promise the moon. So, it is likely that such promises will also be made elsewhere by all political parties. Come April of 2021, may see a touch-and-go battle between the ruling TMC and the BJP. Both parties may promise many such things, which if implemented will set downhill once more (like it went the ‘90s).
( Raychaudhuri is a Kolkata-based journalist and author of books including, A Naxal Story. He is a deputy editor at the Bengali daily, Aajkal)
Disclaimer: The views expressed above are the author’s own. They do not necessarily reflect the views of DH.
