DATELINE: Pre-Election Freebies and the Growing Burden of Public Debt
Masarat Peerzada
India is the world’s largest democracy. Its citizens have the right to elect their governments, and elections form the foundation of the democratic system. Political parties present their policies, programmes and promises to the people through election manifestos.
However, in recent years, a new trend has emerged with increasing intensity in electoral politics. Alongside long-term promises relating to development, employment, education, healthcare and economic growth, political parties are increasingly offering voters direct financial benefits, subsidies and free services.
As elections approach, parties announce new schemes aimed at attracting different sections of society. If one party promises free food grains, subsidised flour or other benefits, another often tries to go a step further. Free electricity, free bus travel, monthly financial assistance for women, cash transfers and other concessions have increasingly become part of electoral campaigns.
There is nothing wrong with providing assistance to the poor and genuinely needy. A welfare state has a responsibility to protect its vulnerable citizens. The real question, however, is: What should be the limit of such assistance, who should be eligible for it, and who will ultimately bear its cost?
Should We Rename Democracy as ‘Freebie-tocracy’?
Every promise should face one basic question: “Where will the money for this promise come from?”
Will new taxes be imposed? Will government expenditure on other sectors be reduced? Will development projects be affected? Will the government have to borrow more money? Will the budgets of existing welfare schemes be cut? Therefore, the success of a welfare scheme should not be judged merely by asking, “What are people receiving?” It is equally important to ask, “What is the cost of providing it?”
Across both rural and urban areas, there are people who are financially well-off, own land or property and have stable sources of income, yet continue to receive government benefits intended primarily for economically weaker households. At the same time, genuinely needy citizens sometimes have to make repeated visits to government offices to obtain ration cards or access other welfare benefits.
If the objective of a government scheme is to support economically weaker sections, its targeting should also be clear.
Election manifestos should not merely tell voters what a party intends to provide. They should also explain how those promises will be financed. We should be able to ask questions for our clarity.
What will be the estimated annual cost of each major promise?
What will be the source of funding?
What impact will the promises have on public debt and the fiscal deficit?
What is the government’s five-year fiscal roadmap?
How will welfare expenditure be balanced against long-term development investment?
What eligibility criteria and periodic review mechanisms will apply?
Free Bus Travel: Benefit, but Also Evaluation
Schemes providing free or subsidised bus travel to women may promote mobility, improve access to education and employment, and increase women’s participation in economic and social life. If such a scheme produces these outcomes, it can have significant social value. But every major welfare programme should also undergo periodic social and financial evaluation.
Has the scheme increased women’s access to education and employment? Are its largest benefits reaching women who genuinely need assistance? What is the annual financial burden on the government? Is there a more efficient alternative?
The answers to these questions should be placed before the public.
Pensions and the Question of Eligibility
Pensions for senior citizens and widows are important social-security measures. Providing support to vulnerable elderly people and those without adequate means of livelihood is a responsibility of a compassionate welfare state.
However, if a financially secure person continues to receive a benefit designed primarily for economically vulnerable citizens, eligibility should be reviewed.
This is not a question of disrespecting the elderly or widows. It is a question of ensuring the fair and effective distribution of limited public resources.
Free Electricity: Welfare or Financial Burden?
Free or subsidised electricity has become a major political issue in several states. Whenever electricity is provided to a section of consumers below its actual economic cost, the cost has to be absorbed somewhere: ultimately by the government, the power sector, taxpayers, or through accumulated financial liabilities.
The question, therefore, is not simply whether electricity support should exist. The more important question is: Who should receive it, and to what extent?
There could also be an option for financially capable households to voluntarily opt out of subsidies. The resources saved could then be redirected towards genuinely needy households or towards strengthening essential public services. Several developed countries also provide social-security benefits and public services to their citizens. But these systems are generally accompanied by taxation, eligibility criteria, expenditure monitoring and fiscal accountability.
India too needs to find the right balance between welfare and fiscal responsibility.
Election Promises Are Part of Democracy, but So Is Accountability
It would be unfair to argue that every free or subsidised service is wrong.
Support for the poor, elderly, widows, persons with disabilities and other vulnerable groups is an essential responsibility of a welfare state.
The problem arises when competition among political parties to announce increasingly attractive benefits becomes so intense that serious discussions about education, healthcare, employment, industry, agriculture, infrastructure and long-term economic development are pushed into the background.
Political parties have every right in a democracy to present welfare programmes before voters. But this right should be accompanied by financial transparency, accountability for major electoral promises and serious consideration of long-term fiscal sustainability.
The Real Question?
The real question is not simply: “What is being given for free?” The real questions are: Who is receiving it? Who is paying for it? And for how long can it be sustained?
Free assistance should serve as a safety net for those who genuinely need it. At the same time, employment, education, skills, industry, healthcare, agriculture and infrastructure should provide citizens with the opportunity to stand on their own feet.
We may have to rethink about ?
“What did you leave for us: the legacy of free handouts or the burden of debt?”
(STRAIGHT TALK COMMUNICATIONS EXCLUSIVE)
