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Monday, May 27, 2024

How Political Freebie kills economy; need for a ban

The economic drop during covid has led to an unexpected and robust efforts of global competition to cope up with financial backlogs post-covid. Governments are struggling to maintain even positive growth of the countries. Nonetheless countries like India have managed their finance well and able to maintain a positive growth but the problem looms ahead in the forms of political decisions.

The free-fall of Sri Lankan economy has left a crucial lesson for Indian politics, igniting the debate over political freebies and its long-term repercussions on the national economy.

What really are Freebies?

Freebies can be better understood as promises by political parties like free water, free energy, free public transportation, and the pardoning loans etc. in order to secure political dominance in upcoming elections. Needless to say, freebies have become an integral tool to win elections.

As recently our Prime Minister Narendra Modi pointed out the “revdi culture” in and its crippling effect on national economy. He referred AAP leader and CM of Delhi Arvind Kejriwal who is regularly offering freebies like free electricity and transportation and using it to win elections.

Freebies vs Welfare Schemes 

In more recent terms, the provisional provision for free water and electricity are no longer sufficient as election gifts, and this trend has acquired more prominence in recent years as political parties try to out beat the rival party at any cost. 

Broadly saying freebies are political announcements focused on winning elections on the public expenses, whereas welfare schemes are service of citizens out of their own money(Public Expenses) generally focused on welfare of society or a class of society.

Freebies comprise a variety of material or services distribution or subsidies that government or political parties’ pre-election announcements which in turn takes the nature of promotion of their names among voters.

Welfare schemes on the other hand are pre-pondered and well-planned upliftment schemes such as the schemes under DPSPs, MGNREGA, Mid-Day Meal Schemes and so on.

Background & Context

The development results from a PIL by Ashwini Upadhyay, a lawyer and former BJP Delhi spokesperson, asking the Election Commission of India (ECI) to issue guidelines prohibiting political parties from promising giveaways during election campaigns. 

The petitioner had stated that political parties make election-related pledges without considering their financial impact on the state economy in order to increase their vote share. Political parties thus use taxpayer money to maintain their positions of power, which has a negative impact on free and fair elections. 

In the current context, the establishment of whether pre-election pledges fell within Section 123 of the Representation of the People Act, 1951 now will be reviewed. Previously, the court ruled that such pledges are not considered corrupt practises as defined by Section 123 of the Representation of the People Act, 1951, and it gave the Election Commission of India instructions on how to draught specific regulations in the absence of any relevant legislation.

According to past research, the amount spent on giveaways ranges from 0.1 to 2.7 per cent of the Gross State Domestic Product (GSDP) for various states that may be more heavily indebted. The Supreme Court is considering arguments to prevent political parties from giving out nonsensical giveaways with money from the public budget.

Aug 2022, the apex court also tried to address the considerable severe issue of freebies announced during elections where stakeholders including the central government, Niti Aayog and the Finance Commission are to come under direct scrutiny. The big role for involvement of the Finance Commission will then be centered around the marginalization of funds and the state percentage of how much gets spent on free schemes.  

Former Chief Justice of India NV Ramana also referred this poisonous culture of promising freebies during elections “a very serious issue.

Can India afford more Freebies?

India in the current economical context ranks at a safe and stable place, yet one which is as quick as a matchstick to douse off than the majority of world economies. No country is immune to global inflation and a slowdown.

Meeting political greed out of public expenses has never been sustainable rather destructive.

Empowering the citizens is the only solution to a healthy economy. As it is said

“Give a Man a Fish, and You Feed Him for a Day. Teach a Man to Fish, and You Feed Him for a Lifetime”

Hence welfare scheme will empower citizens but the freebies will cripple existing strengths.

Economic blunder to learn from

In order to fulfil electoral promises, the Rajapaksa administration in Sri Lanka slashed taxes in 2019. S&P Global Ratings and Fitch Ratings swiftly downgraded the nation, claiming that the tax cuts jeopardized its capacity to manage its finances and debt.

 Following that, other measures were put in place to draw foreign direct investment, such as the use of organic fertilizer and tax exemptions for businesses.

By assessing the present condition and useful majors, the government provides subsidies to members of a particular industry for a set period of time.

There indeed was no error except for the negligence on part of the government which did not take heed of the GDP debt ratio. While provisions were put out in favor of the voters, experts including NITI Aayog member Ramesh Chand have raised concerns on the uncontrolled freebie culture in India and the possible downfalls in the long run.

Thought to ponder on 

Perhaps, total cancellation of freebies or pre-political power favors may be impossible to make a total disappearance. However, the statutory bodies that regulate and sanction the funds in the first place need to undergo a vigilant change of system if the root cause and need to mindfully regulate freebies that too if they are sustainable and beneficial to public. Alternative key goals should also be the first priority of policymakers.

The public may also be the key players accountable for the choices they make as faces of the nation. Also, freebie-cantered political discourse is dangerous because it significantly undermines the foundation of free and fair elections.

Written by Thekuvolu Theluo and edited by Suraj Maurya

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