How to Make Freebies in Electoral Politics Work in India's Interest

 

India is a country with a large and diverse population, where elections are often contested fiercely by various political parties. One of the strategies that some parties use to attract voters is to offer freebies, which are goods or services that are given free of charge or at a subsidized rate. Freebies can range from basic necessities like food, water, electricity, and health care to luxury items like laptops, smartphones, bicycles, and gold.

But what are the implications of this practice for the economy, society, and democracy of India? In this article, we will try to answer some of the questions related to freebies in electoral politics in India.

Political parties giving freebies

• There is no definitive list of political parties that give freebies to the Indian public, as different parties may have different definitions and criteria for what constitutes a freebie. However, some of the parties that have been known to offer freebies in recent years include:
• The All India Anna Dravida Munnetra Kazhagam (AIADMK), which has promised free laptops, washing machines, solar stoves, and gold for women in Tamil Nadu. The All India Anna Dravida Munnetra Kazhagam (AIADMK), which has spent around Rs 25,000 crore on various schemes such as Amma canteens, Amma water bottles, Amma salt etc. It has also promised free laptops, washing machines, solar stoves etc in its 2021 manifesto.
• The Dravida Munnetra Kazhagam (DMK), which has promised free tablets, data cards, gas stoves, and cash assistance for women in Tamil Nadu. The Dravida Munnetra Kazhagam (DMK), which has spent around Rs 20,000 crore on various schemes such as Kalaignar TV sets, Kalaignar insurance scheme etc.
• The Aam Aadmi Party (AAP), which has provided free electricity, water, bus rides, and health care in Delhi.
• The Samajwadi Party (SP), which has distributed free laptops, smartphones, bicycles, and pensions in Uttar Pradesh.
• The Telangana Rashtra Samithi (TRS), which has offered free power supply to farmers, rice at Rs 1 per kg, and cash transfers to various sections of society in Telangana.
• The Yuvajana Sramika Rythu Congress Party (YSRCP), which has implemented schemes like free housing, education, health care, and pensions in Andhra Pradesh.

Pros and cons of freebies

Freebies can have both positive and negative effects on the economy and society of India. Some of the pros and cons are:

Pros:

• Freebies can provide relief and support to the poor and marginalized sections of society who may not have access to basic amenities and opportunities.
• Freebies can stimulate demand and consumption in the economy, especially during times of crisis or slowdown.
• Freebies can boost the supplier industries that produce or provide the goods or services that are given as freebies.
• Freebies can enhance human capital and social welfare by improving education, health, and empowerment outcomes.

Cons:

• Freebies can lead to fiscal instability and debt burden for the state governments that have to finance them from their limited resources or by borrowing from the market or the Centre.
• Freebies can undermine the credit culture and market discipline by distorting prices and incentives for private investment and production.
• Freebies can erode the quality and accountability of public service delivery by creating dependency and complacency among the beneficiaries and providers.
• Freebies can hamper free and fair elections by influencing voter behaviour and choices based on short-term gains rather than long-term policies.

Amount spent by all political parties on freebies from 2014-2023

There is no official or reliable data on the total amount spent by all political parties on freebies from 2014-2023. However, some estimates based on various sources suggest that:

According to a report by the Reserve Bank of India (RBI), state governments spent Rs 2.7 lakh crore on subsidies in 2019-20, which was 6.8% of their revenue expenditure. This included subsidies on food, power, water, transport, education, health, etc. Some of these subsidies may be considered as freebies by some parties or observers.

According to a report by the Association for Democratic Reforms (ADR), 18 political parties spent Rs 6.5 lakh crore on elections from 2015 to 2020. Of this amount, Rs 3.4 lakh crore or 52% was spent on publicity alone. This included advertisements, media expenses, social media campaigns, rallies, flags, hoardings etc. Some of these publicity expenses may be related to freebie promises or schemes by some parties.

According to a report by PRS Legislative Research (PRS), state governments announced more than Rs 1 lakh crore worth of welfare schemes in 2021 alone. These included schemes like loan waivers, cash transfers, ration kits etc. Some of these schemes may be seen as freebies by some parties or voters.

Types and kinds of freebies 

Freebies can be classified into different types and kinds based on various criteria such as:

The nature of the good or service: Freebies can be tangible or intangible; durable or perishable; essential or discretionary; merit or non-merit; public or private etc. For example, free rice is a tangible, perishable, essential, merit, and public good; while free laptop is a tangible, durable, discretionary, non-merit, and private good.

The mode of delivery: Freebies can be delivered in kind or in cash; directly or indirectly; universally or selectively; conditionally or unconditionally etc. For example, free electricity is delivered in kind, directly, universally, and unconditionally; while free bus ride for women is delivered in kind, indirectly, selectively, and conditionally.

The source of funding: Freebies can be funded by the state government or the central government; by the general budget or by a specific fund; by tax revenue or by borrowing etc. For example, free health care in Delhi is funded by the state government, by the general budget, and by tax revenue; while free housing in Andhra Pradesh is funded by the state government, by a specific fund, and by borrowing.

Affect the debt to GDP ratio

The debt to GDP ratio is a measure of the total debt of a country or a state as a percentage of its gross domestic product (GDP). It indicates the ability and sustainability of a country or a state to repay its debt obligations. Freebies can affect the debt to GDP ratio in different ways depending on how they are financed and how they impact the economy.

• If freebies are financed by borrowing from the market or the Centre, they increase the debt of the state government and hence its debt to GDP ratio. This can lead to higher interest payments and lower credit ratings for the state government.
• If freebies are financed by cutting down other expenditure or increasing taxes, they may not affect the debt of the state government but may affect its growth and revenue prospects. This can lower the GDP of the state and hence increase its debt to GDP ratio.
• If freebies stimulate growth and consumption in the economy, they may increase the GDP of the state and hence lower its debt to GDP ratio. However, this effect may not be sustainable or sufficient to offset the cost of freebies.
• If freebies hamper growth and investment in the economy, they may decrease the GDP of the state and hence increase its debt to GDP ratio. This can create a vicious cycle of low growth and high debt.

Are freebies a non-productive incentive?

Freebies can be seen as a non-productive incentive for the Indian public if they:

• Reduce the incentive to work hard and earn income by providing goods or services for free or at a subsidized rate.
• Reduce the incentive to save and invest by increasing consumption and reducing disposable income.
• Reduce the incentive to pay taxes and bills by creating a culture of dependency and entitlement.
• Reduce the incentive to demand quality and accountability from public service providers by creating complacency and satisfaction. 

However, freebies can also be seen as a productive incentive for the Indian public if they:

• Increase the human capital and social welfare of the poor and marginalized sections of society by providing them with basic amenities and opportunities.
• Increase the demand and consumption in the economy by boosting disposable income and purchasing power.
• Increase the supplier industries that produce or provide the goods or services that are given as freebies.
• Increase the political participation and awareness of the voters by making them more informed and engaged.

Sections of society that have benefited from freebies

The sections of society that have benefited from freebies may vary depending on the type and kind of freebie that is offered. However, some of the common sections that have benefited from freebies are:

• The poor and marginalized sections of society who may not have access to basic amenities and opportunities such as food, water, electricity, health care, education etc.
• The women and girl children who may face discrimination and barriers in accessing public services such as transport, education, health care etc.
• The farmers and rural population who may face challenges such as low productivity, high input costs, market fluctuations etc.
• The youth and students who may need support for skill development, employment generation, digital literacy etc.

Possible alternatives to freebies:

• Offering long-term policies and programs that address the root causes of poverty, inequality, unemployment, and underdevelopment in the country. For example, investing in education, health, infrastructure, agriculture, and industry to create more opportunities and improve living standards for the people.
• Promoting good governance and accountability by ensuring transparency, efficiency, and responsiveness in public service delivery. For example, using technology to reduce corruption, red tape, and leakage in welfare schemes.
• Encouraging civic participation and awareness by engaging with the voters on various platforms and issues. For example, conducting regular surveys, consultations, debates, and feedback mechanisms to understand the needs and preferences of the people.
• Building trust and credibility by delivering on the promises made during the election campaigns. For example, implementing the manifesto pledges, monitoring the outcomes, and reporting the progress to the public.

These alternatives can help political parties to win the support and confidence of the voters without resorting to freebies that may have negative consequences for the economy and society of India.

Technology can reduce corruption in welfare schemes by increasing transparency, efficiency, and accountability in the delivery of public services. Some of the ways that technology can help are:

• Using direct benefit transfer (DBT) to transfer welfare benefits directly to the bank accounts of the beneficiaries, thereby reducing the scope for leakages, delays, and intermediaries. For example, the MGNREGS scheme in India has implemented DBT and Aadhaar linked payments (ALP) to credit wages directly into the workers’ bank accounts.
• Using big data and analytics to detect and deter fraud and collusion by analyzing large volumes of data to identify patterns, trends, and anomalies. For example, the Australian Tax Office uses big data to search for evidence of tax evasion and non-compliance.
• Using online platforms and mobile applications to provide information and feedback mechanisms to the citizens, thereby enhancing their awareness and participation. For example, the PRAGATI platform in India enables the Prime Minister to review the progress of various projects and schemes and address grievances of the people.
• Using biometric authentication and digital identity to verify the identity and eligibility of the beneficiaries, thereby preventing duplication, impersonation, and misuse. For example, the Aadhaar system in India provides a unique 12-digit identification number to every resident based on their biometric and demographic data.

These are some of the examples of how technology can reduce corruption in welfare schemes by making them more citizen-friendly, responsive, and effective.

Citizens can participate in the monitoring of welfare schemes by using various methods and platforms to provide feedback, information, and complaints to the government and other stakeholders. Some of the ways that citizens can participate are:

• Using mobile phones and interactive voice response (IVR) systems to report their experiences, opinions, and grievances about the welfare schemes. For example, a project by IIT Delhi used IVR tools to capture community perceptions, improve awareness, and verify official records of the rural employment guarantee scheme in Haryana.
• Using online platforms and social media to access information and share views about the welfare schemes. For example, the National Portal of India provides a single point access to information about several welfare schemes of the government and their various aspects.
• Using biometric authentication and digital identity to verify their identity and eligibility for the welfare schemes. For example, the Aadhaar system in India provides a unique identification number to every resident based on their biometric and demographic data.
• Using social audits and civil society organizations to monitor and evaluate the implementation and impact of the welfare schemes. For example, the Mazdoor Kisan Shakti Sangathan (MKSS) is a grassroots organization that conducts social audits of various welfare schemes in Rajasthan.

These are some of the examples of how citizens can participate in the monitoring of welfare schemes by using technology, information, and collective action. By doing so, they can enhance their awareness, empowerment, and accountability of the public service delivery.

Social audits can improve transparency and accountability by:

• Providing a formal and systematic review of the social and environmental performance of an organization, including its impact on stakeholders such as employees, customers, and the community.
• Ensuring that the organization meets its social responsibilities and identifies improvement areas, as well as challenges and risks.
• Involving the participation and feedback of the stakeholders, especially the beneficiaries of the welfare schemes, in the assessment and evaluation of the organization’s policies, practices, and outcomes.
• Making the results of the social audit public and accessible to the stakeholders, as well as the media and the regulators, to enhance their awareness and trust in the organization.

By doing so, social audits can help organizations to create, improve, and maintain a positive public image and reputation, as well as foster a culture of social accountability and responsiveness.