IRRATIONAL FREEBIES CULTURE

IRRATIONAL FREEBIES CULTURE

Recently the Supreme court bench said it will see to what extent it can or cannot intervene to stop political parties from distributing irrational freebies.

Even the court asked the central government whether distributing irrational freebies during election campaigns is financially viable.

It also referred to the use of the expertise of the Finance Commission in curbing the irrational poll freebies.

Supreme court view

The Supreme Court had also issued the notice to the Centre and Election Commission of India on the plea against freebies offered by the state parties.

Election Commission of India Dilemma:

• ECI said it has no power to regulate or take any action against the parties making such poll promises and distributing freebies.
• ECI stated that offering freebies before or after the election is a policy decision of the political parties.
• The ECI had said that though the Directive Principles of State Policy enshrined in the Constitution enjoined upon the State to frame various welfare measures for the citizens and, therefore, there could be no objection to the promise of such welfare measures in election manifestos, political parties should. But the problem is making promises which are likely to vitiate the purity of the election process or exert undue influence on the voters in exercising their franchise.
• ECI also stated that it cannot regulate the state policies and decisions which may be taken by the winning party when they form the government.

Freebies

• There is no such thing as a freebie in economics because ultimately somebody has to bear the cost of the supposedly free giveaways. The concept is popularly known the “There’s No Such Thing as a Free Lunch”.
• It means that everything has to be paid for by taxes if not today then tomorrow.
• Political parties promise to offer free electricity, water supply, monthly allowance to unemployed or even daily wage workers, and women as well as gadgets like laptops, smartphones, and tablets to secure the vote of the people.
• The states have become habituated to giving freebies, be it in the form of loan waivers or free electricity, cycles, laptops, TV sets, and so on.
• In the last 30 years there has been rising inequality and some kind of relief to the population in the form of subsidies may not be unjustified but actually necessary for the economy to continue on its growth path, as argued by some political parties.

Reason for freebies

• The failure of the parties and governments to deliver development to the ordinary people has led to the increasing phenomenon of “freebies” and the parties have to resort to it to win over the voters.

Need for freebies

• Facilitates Growth and helps in reducing poverty and inequalVarious examples show that some expenditure outlays do have overall benefits such as the Public Distribution System, employment guarantee schemes, support for education and enhanced outlays for health, mainly during the pandemic.
• Helps the Lesser Developed States: With the states that have a comparatively lower level of development with a larger share of the population suffering from poverty, such kinds of freebies become need/demand-based and it becomes essential to offer the people such subsidies for their upliftment.
• In the states which lack development, freebies become need/demand-based and it becomes essential to offer the people such subsidies for their upliftment.

Challenges of freebies

Financial irregularity and fiscal mismanagement

• The irrational freebies have played havoc with state finances. Coming to the election-bound states, UP’s public debt is Rs 6.1 lakh crore, Punjab’s Rs 2.8 lakh crore, Uttarakhand’s Rs 68,000 crore, and Goa’s Rs 18,844 crore. A recent RBI report said the outstanding liabilities of states had increased from Rs 16.48 lakh crore in 2011 to Rs 42.92 lakh crore in 2019.

• The CAG had pointed out that the share of capital expenditure has reduced from 14.39% in 2013–14 to 8.26% in 2017–18 in Delhi. All this is mere because the AAP government has to finance its election promises of free power, water, and public bus service for women.

The burden on Public Exchequer:

• If states continue with fiscal profligacy, they will be heading towards the unsustainable high debt with catastrophic consequences for macro-economic stability and the ability of India to sustain high growth.

Lacking equity or fairness:

• Promise/distribution of irrational freebies from the public fund before the election unduly influences the voters, shakes the roots of the free-fair election, disturbs level playing field, vitiates the purity of the election process, and also violates Articles 14.
• Even debt-ridden States, were promising/distributing these freebies to garner votes and create uneven playing fields in the elections.
• Distributing private goods services, which were not for public purposes, from the public fairly violates the Constitution.

Promotes tax avoidance:

• Freebies may even trigger non-compliance amongst taxpayers and eventually lead to lower revenue.

Freebies provide no sustainable solution

• Freebies in the form of loan waivers not only hamper banks’ financial capabilities but also encourages poor credit system and do not benefit farmers in long run.
• As Madras High court stated that the freebies culture In Tamil Nadu is making people lazy and those migrant workers from the north and northeastern parts of the country had to be employed in every other field of work be it hotels, industries, shops, and saloons. Migrants are employed even for agricultural work in the State.

Creates Dependency than the empowerment of poor

• Freebies violate the constitutional mandate of extending benefits for a public purpose and instead create private benefits. For example, often the distribution of free laptops is seen as enhancing the capacities of the students on par with the new generation’s needs, but it does not increase the purpose of quality education.
• Due to a lack of proper infrastructure facilities and specialized teachers, parents prefer to move their students to private schools. Freebies deny the due share of state resources towards the development of the poor.

A Step Away from the Environment:

• When the freebies are about giving free power, it would lead to overuse of natural resources such as declining water table, wastage of electricity, and various other things
• Also, focusing on renewable energy systems will also get distracted.

Way Forward

• The focus must be shifted from freebies to development promising better rule of law, equal pay for equal work, clean water, equal quality education, quality healthcare, quality infrastructure, speedy justice, free legal aid, citizen charter, judicial charter, efficient police system, the effective administrative system rather than arbitrarily promising irrational freebies from the public fund, which will empower the individual, reduce inequality and poverty.
• The Centre must enact a law governing the promises made by political parties in their election manifestos and empower the Election Commission of India to take action against parties that make irrational promises.
• Clearly define freebies and what they can include so that it does not come in the way of long-term development.

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