A promise of a free Gulf trip for select voters in Kerala; cash transfers, festival “gifts” and wage top-ups released in a rush across poll-bound states—as elections approach, the grammar of Indian politics becomes predictable. This is not an isolated flourish of generosity. It is a pattern.
Inducement vs. Policy
With assembly elections looming in Assam, West Bengal, Tamil Nadu, Kerala, and Puducherry, incumbent governments have together reportedly promised or disbursed over Rs 37,000 crore, a substantial portion of which has flowed out in just the past month through cash doles, one-time transfers, and hurried enhancements to existing schemes.
The timing is instructive. Welfare, when compressed into the electoral calendar, begins to look less like policy and more like inducement. The debate is often framed in moral terms—Prime Minister Narendra Modi has criticised the “revdi culture”—but the reality is more bipartisan. Across states and parties, the impulse to reach voters’ wallets just before polling day has become entrenched. Tamil Nadu advanced payments and bundled them with Pongal benefits to spend over Rs 13,000 crore; West Bengal disbursed more than Rs 3,000 crore in the span of weeks; and Assam saw payouts of Rs 3,600 crore in a single day. The political calculus is clear: direct transfers, especially to women voters, have emerged as a reliable electoral lever.
To be sure, not all such spending is inherently flawed. There is a legitimate role for welfare in addressing structural inequalities and providing social security. But the distinction between welfare and opportunistic populism lies in intent, design, and timing. Well-designed programmes are predictable, budgeted, and outcome-driven. Pre-election handouts, by contrast, are fiscally opaque and aimed at immediate political returns. The blurring of this line is precisely the problem. Proponents often argue that such measures are no different from tax concessions or corporate incentives. That comparison is convenient but misleading. Incentives tied to investment or production are at least notionally linked to future economic activity. Election-time giveaways, particularly one-off cash transfers, rarely create durable assets or capabilities.
Fiscal Hangover
The fiscal implications are harder to dismiss. States already operate under constrained balance sheets. In Bihar, pre-election schemes last year were estimated at around 4% of GDP, even as the fiscal deficit stood near 6%. In West Bengal, recent election-linked outgo accounts for as much as 16-17% of tax revenue. Across states, fiscal deficit levels frequently exceed the 3% of GSDP benchmark, while outstanding liabilities hover above 20%. These are not trivial numbers. They narrow the space for productive spending on infrastructure, health, and education—the very investments that underpin long-term growth. Institutions have begun to flag the risks. The Supreme Court has cautioned against indiscriminate freebies, drawing a necessary distinction between welfare and electoral largesse. The Reserve Bank of India has repeatedly warned about the rising debt burden on states. Yet, political incentives continue to favour immediacy over sustainability.
That, ultimately, is the crux of the issue. Freebies persist not because they are economically sound, but because they are electorally effective. They convert public finance into a campaign tool, shifting the focus from governance to gratification. For voters, too, this creates a perverse cycle where the most tangible benefits arrive not through steady policy, but through periodic political competition. Breaking that cycle will require more than judicial nudges or fiscal warnings. It calls for political restraint and a clearer compact with voters—one that privileges credible welfare and long-term investment over short-term giveaways.