The Supreme Court on Wednesday advised the Union government to form a composite expert committee to examine the pros and cons of freebies given out by governments and ways to curb irrational electoral promises that cost the exchequer dear. The committee may deliberate on the issue and come out with a report, it said.
The panel may comprise Niti Aayog, RBI, Election Commission of India, Finance Commission, ruling and opposition parties and other stakeholders, the SC said.
A bench led by Chief Justice NV Ramana said the practice of political parties promising free goods and services to electorate if voted to power are “serious economic issues” related to policy and every stakeholder, including “taxpayers and beneficiaries,” should participate in the debate.
The court’s remarks came as Solicitor General Tushar Mehta, on behalf of the Union government, noted that “mindless” freebies and populist promises by political parties often lead to “economic disasters”. He suggested that the Election Commission should re-examine the issue.
The top court posted the matter for further hearing on August 11, when the Centre will spell out its stand more clearly.
NK Singh, who chaired the latest (15th) Finance Commission (FC) and headed the panel that recommended capping of the general government debt at 60% of the gross domestic product, recently told FE that while tax devolution is states’ inalienable right, the FC could be one of the institutional mechanisms to regulate spending on freebies, which destroy the foundation of macroeconomic stability. He said the revenue deficit grants to states, for instance, could be linked to curbing of freebies and off-budget liabilities.
The CJI said, “Everybody feels the money paid as taxes is not paid for the purposes of developments etc and thus everyone should use an independent forum (to regulate freebies) and court should not be that forum”.
Mehta said: “These populist announcements distort the informed decision making of the voter and a voter wouldn’t know what is going to fall on him”. Supporting the petitioner, the SG further said that “it is like my right pocket is getting something but it would be taken from my left pocket later.”
But senior counsel Kapil Sibal suggested that ECI should be kept out of the matter, as it is a political and economic issue and does not just concern elections, and there should be a debate in Parliament on it. “ECI is MFI (Most Favoured Institution),” Sibal said.
The Bench, however, said no political party would like to do away with freebies. “Do you think there will be a debate in Parliament? These days everyone wants freebies. Not a single political party will allow freebies to be taken away…We take the side of the ordinary people, the downtrodden. Their welfare has to be taken care of. We are looking at the national economic well-being,” the CJI said.
The SC then asked the Centre, the ECI, Sibal and PIL petitioner advocate Ashwini Kumar Upadhyay to give “suggestions for the composition of a body” within a week after examining how to regulate freebies and give report to Centre and the top court.