Earlier this month, when the dates for the upcoming Delhi Assembly polls were announced, the chief election commissioner confessed that the panel’s hands were tied on the thorny issue of “freebies” promised by political parties to voters. He also expressed difficulty to define it and sought legal, acceptable answers to what constitutes a freebie. In the absence of any legal diktat as yet, Delhi has given a free hand — as indeed have other states that held elections in the recent past — to parties attempting to outdo each other with a laundry list of handouts in their manifestos. The Aam Aadmi Party (AAP) and the Bharatiya Janata Party (BJP) have made mirroring bids, some tinged with appeals to rival constituencies. The incumbent AAP was off the blocks with a promise of financial assistance to temple priests — lest it is perceived as indifferent to the clergy — apart from women and the elderly. It also promised to fund foreign education of students from underprivileged castes, and payments to its loyal base of autorickshaw drivers.
In 2022, Prime Minister Narendra Modi castigated other parties for propagating a “revdi culture”. Ironically, the BJP’s manifesto has sought to go one up on the AAP playbook. Among its pledges are greater monthly sums to poor women besides `21,000 to pregnant women, subsidised cooking gas, pension to the elderly, and aid to students. Elections in India have repeatedly shown that freebies pay rich dividends in terms of results. For instance, in Maharashtra last month the BJP-led alliance returned to power after its populist measures had incurred a burden of `90,000 crore and with fresh promises threatening to pile on recurring expenses. Competitive populism is par for the course, and is a growing trend that is unlikely to vanish as parties view electoral triumph as their ultimate, albeit myopic, goal.
A plea claiming freebies amount to bribery and impose unaccounted burden on the state exchequer is being heard by the Supreme Court which has sought responses from the Centre and the election commission. There is no denying that the demarcation between welfare schemes and freebies is blurred. Neither is incentivising voters illegal. In fact, schemes like the midday meal, a nationwide nutritional programme for government schoolchildren, began as a freebie in Tamil Nadu. Such welfare initiatives, including redistribution plans like the rural employment guarantee scheme, have helped alleviate poverty and reflect fiscally responsible spending. Governments should design plans keeping in view an adequate fiscal headroom. That is not quite the case in Delhi, which has so far been a revenue-surplus state. The national capital’s finances are stretched, and its revenue surplus shrank to `4,966 crore in FY24 compared to `14,457 crore in FY23. For this financial year, the state government has allocated more than 8% of its total outlay on populist schemes.
If either the AAP or the BJP, who are in a two-horse race, were to fulfil their promises after coming to power, it could entail additional expenses of over `5,000 crore and raise the share of subsidies in Delhi’s budget from 15% to 20% of its total expenditure. Increased spending on goodies have contributed to worsening finances of several Indian states, forcing them to borrow more at high cost, and the central bank has warned that they could hinder social and economic infrastructure. Political parties will do well to take note and avoid reducing elections to a clash of handouts.