JOIN USThe rich, the rest and freebies: Unpacking a problematic narrative
Ever since Karnataka’s election results were announced, the discourse on freebies ruining the economy and making the poor ‘lazy’ has again taken centre stage. News channels have been speculating on how many thousands of crores it will take for the Congress government to fulfil its five poll promises, portraying them as a massive burden on the state economy.
On social media, the usual disenchantment over “taxpayer money” being misused on “freebies” has only gotten shriller. With freebies and taxpayer money becoming the favourite buzzwords for the privileged, who indulge in political commentary as a recreational hobby, it is important to unpack them and call out the problematic nature of this narrative.
To strengthen and justify their argument, a very common misconception is tossed around - that only around 3 per cent of Indians pay tax, with the implicit accusation being that the rest (97 per cent) are freeloaders.
This taxpayer card is wielded by those priding themselves on their membership in this 3 per cent club to claim a greater say over government spending, and to denounce welfare measures targeted at the rest by pejoratively terming them freebies. But the fact is that every Indian is a taxpayer.
The 3 per cent figure quoted is the approximate share of the population that pays income tax, which is only one of the dozens of ways in which taxes are collected in India. While an exhaustive listing and explanation of taxation is beyond this article’s scope, a couple of examples should suffice to bust this misconception.
Consider a poor woman whose income from domestic work does not cross the income tax exemption limit. As per this discourse, she is a freeloading beneficiary of government freebies.
But for everything she buys regularly, from food and groceries to soaps and toothpaste, she pays GST (Goods and Services Tax). Consider the millions of cab drivers and food delivery workers who move around our cities taking us to work and bringing us food.
Every day, they refill their vehicles with hundreds of rupees worth of fuel, a substantial share of which is collected as excise by the states and cess by the Union government (Rs 55 for every Rs 100 worth of petrol; Rs 50 for every Rs 100 worth of diesel). It is up to the reader to calculate how much this adds up to over a year. They also pay GST while renewing their vehicle insurance every year.
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This is notwithstanding the many other taxes they pay on property they may own, goods and services they purchase, liquor they may consume, etc. Even after paying all this tax, any government policy designed for their welfare will be termed a freebie.
Since every Indian – who buys goods and services at the bare minimum – pays tax, and no one has a greater say over government spending on account of being the only taxpayers, we do not even have to use the rationale of redistribution to justify why the government must spend especially on those who do not earn enough to pay tax.
The other overwhelming belief among the rich is that the bare minimum support offered by government welfare schemes will make the poor withdraw from the labour force and slack off. This not only reveals their ignorance about and condescension towards the latter’s lives and ambitions, but also their fear that the poor may not be as vulnerable to exploitation at their hands, with these schemes providing them a safety net.
Even with its apparent lack of merit, a closer examination of the narrative’s popularity among the rich is important, as it has implications for politics far beyond Karnataka. It is an indicator of the dissonance in the voting pattern between them and the rest of the population, a trend that may well repeat elsewhere.
Pre-poll surveys, exit polls, and analyses of election results emerging from Karnataka have all made it apparent that the highest preference for the right-leaning BJP – which, at least symbolically, frowns upon freebies – was shown by the wealthiest and most educated segment.
Preference for the left-leaning Congress and JD(S) – which campaigned on the plank of welfare schemes – increase as we proceed to the poorer and less educated segments.
Three of the four districts in Karnataka where the BJP managed to win a majority of the Assembly seats are Bengaluru Urban (16/28), Dakshina Kannada (6/8), and Udupi (5/5), districts that constantly top the Human Development Index and per-capita income rankings in the state, statistics that indicate a higher concentration of the rich. Everywhere else, the Congress and the JD-S won a majority of the seats.
This dissonance in the voting pattern can be attributed, at least in part, to the increasing inequality between the rich and the rest, in Karnataka and across India.
A recent report by Oxfam India showed the rich accumulating a greater share of wealth in recent years, while economists like Jean Dreze have found the rest to have seen no growth in their real wages (adjusting for inflation); and the Centre for Monitoring Indian Economy has been constantly reporting increased levels of unemployment.
The rich are still able to afford to vote based on issues of identity whipped up by the BJP, while the poor – forced to choose between issues of identity and welfare – are choosing the latter. This is why the ire of the rich has turned towards welfare politics.
(The writer is a policy researcher and data analyst at a non-profit.)