Is ‘Freebie’ Culture Hampering Democracy?
Representational Use Only.
In July 2022, Prime Minister Narendra Modi criticised the concept of ‘revdi culture’ and accused the political parties of harnessing votes by offering freebies to the voters. Many discussions and debates have happened around the term since, following which a Public Interest Litigation was filed in the Supreme Court. The then Chief Justice NV Ramana opined that freebies did not guarantee the win of any political party and that voters would choose dignified earnings rather than freebies if given a choice.
The Union government and the leaders of the ruling Bharatiya Janata Party (BJP) continue to criticise Opposition parties for trying to lure voters with freebie offers. But contradictions that the party has found itself in have raised confusion and questions from various corners.
A closer look at the general election manifestos by the BJP-led National Democratic Alliance since 1999 prior to the general elections shows that BJP never shied away from promising subsidies and income transfer – be it for maternity care or old age pension. There are tax exemptions, interest-free loans, and special economic packages aimed at young entrepreneurs and women, irrespective of their caste or class.
The most recent general election manifesto, released in 2019, offers financial support under Pradhan Mantri Kisan Samman Nidhi Yojana to be extended to all farmers, a pension scheme for small and marginal farmers, and interest-free Kisan Credit Card loans. It also offers collateral-free credit up to Rs 50 lakh for entrepreneurs, with the government guaranteeing up to 50% of the loan amount for female entrepreneurs and up to 25% for male entrepreneurs. Subsidised foodgrains will have sugar at Rs 13/kg/family every month, and a pension scheme was to be introduced to cover all small shopkeepers. While these are only a few of the many offers in the manifesto, why the party has taken a U-turn in three years in the case of election offers is a puzzle.
"The issue of freebies is raised by the Prime Minister of a government that has been very liberal with distributing freebies," said Yashwant Sinha, who served as the Finance Minister in Atal Bihari Vajpayee’s NDA government.
While the discussions on freebies were young and happening, the government extended the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY), which provides 5 kg wheat or rice per person free of cost to 80 crore of the poor every month for another three months. Critics are of the opinion that this move was eyed at the state elections coming up in Gujarat and Himachal Pradesh. If that is the case, attacking Opposition parties regarding their promises in their election manifestos while using the power of the government to provide aid and enact pro-people policies screams at the double standard and blatant misuse of power by the government.
One should not forget that the state and local body elections in non-BJP-ruled states in recent years have seen BJP wrongfully claiming that the welfare policies initiated by several states were originally policies of the union government.
In a conversation with the NewsClick, former Rajya Sabha MP and Congress leader Rajeev Gowda said: "In the Bihar elections, the first thing that Nirmala Sitharaman (finance minister) did was announce free vaccines for the people of Bihar. This is the standard double talk that BJP does."
The whole idea -- that the Union government is the custodian and controller of all policies by the states is a myth in a federalist State – has been questioned by various Opposition and regional parties.
The Power of Manifestos
Releasing manifestos prior to elections is a general practice in a multi-party democracy. It serves as a concept note on the way each party envisions the growth of the region if elected to power. It is only logical to have various parties state the developmental and welfare policies they will implement once they are elected. It can also be used to hold the government accountable in case the promises aren't fulfilled. Holding them accountable by way of elections in the following term is a beautiful practice that democracy, in its truer sense, offers.
Political parties getting votes by way of promises is arguably the right way in a democracy. Why would anyone vote for a particular party if not to make her life better? Why do we think that people voting for parties that offer the most is a wrong practice? When it works the same for all service providers, why should the government be any different? Furthermore, a manifesto has details regarding not just welfare but the general functioning of the potential government with regard to national security, economy, legislature, and so on. Focusing on freebies alone highlights the desperation of the people.
Feminist activist Kavita Krishnan stated that the word ‘freebie’ in itself was insulting to the people.
"Citizens are entitled to various services and facilities – be it food or transportation or toilets. That's not to be seen as receiving from the government, nor as a freebie. The government owes you these. They're not paying it from personal funds, but from taxes that even the poorest person pays even when she buys a bar of soap," she said.
Real freebies, according to her, were those that were called incentives given to corporates in the form of tax waivers and cheap loans.
Blaming Opposition parties for trying to "woo" voters with freebies has several issues. First, voters are denied agency and autonomy in their voting decision. Political parties and leaders take a high ground when claiming that people vote for freebies alone. The rational decision-making ability of a voter is questioned here by a patronising person or people in power. It establishes a hierarchy that claims that the people with the means and resources know better to decide for themselves, while the ones at the lower end of the economic and social strata are incapable of knowing what's better for them or deciding what is better for the common good.
Second, criticism against freebies, or rather welfare policies, isn't new in political and social discourse. Even popular film industries have movies that have "super-human" heroes transforming the existing "filthy politics" for the better, blaming people who vote for freebies as the creators of corrupt politicians.
The general notion among the middle class and above regarding the poor benefitting from freebies destroying the sanctity of democracy stems from nothing but a privilege. Even the term "freebie" reflects this notion. The idea that social and economic hierarchy existing in society shall never be destroyed could be a reason for these privileged lamenting.
Third, the opposers often see only benefits to the poor as ‘freebies’. Tax exemptions, tax holidays, corporate favouritism, and writing off bad loans are often considered necessary supply-side interventions for the economy's growth. The richest man in the country became the second richest man in the world briefly while the entire nation is struggling to come out of the pandemic-induced wreck in the economy. Reports suggest that India added five billionaires every month in 2020-21, while poverty doubled. The reason is nothing but the significant aid that the rich corporates in the country get from the government, and they are seldom called freebies.
The question of freebies arises only when the poor are the beneficiaries. But why do the poor need freebies in the first place? Often forgotten in the debate are the structural issues that force people to wait for "benefits" from the government when in reality dignified life is their constitutional right.
Freebies Versus Welfare
Does there exist a thin line between ‘freebies’ and welfare schemes? Discussions on freebies have often featured opinions that state that productive welfare schemes are okay while certain freebies are irrational. It seems like this imaginary line that exists between freebies and welfare is quite subjective.
Renowned economist Arun Kumar has a clear distinction for freebies. According to him, freebies benefit the individual, while welfare schemes have a larger positive externality on society.
"Freebie is when something is given without a consequence for the public. Welfare measure is when you expect a wider connotation. They are things that lead to better outcomes for the public," he says.
Sinha has a different opinion on the matter. While speaking to NewsClick, he made a distinction between subsidised commodities and those that were given free. He supposes that the former is acceptable as a welfare measurement while the latter, especially in the case of luxury items, is a freebie and has to be avoided.
On the other side, economist and former finance minister of Kerala, Thomas Isaac, believes that there's no way in which we can distinguish between the two.
"It is a subjective assessment, and objective criteria cannot be found for it," commented Isaac.
Several studies have found that the mid-day meal scheme, originally introduced by Tamil Nadu in the 1960s, greatly increased the enrolment of children in school. The success of the programme resulted in the government introducing it nationwide. But a less often talked about the scheme is that of providing cycles to girl students that were adopted by several states. Studies have shown that giving cycles to girl students increased their enrolment rate in secondary school education and helped in reducing the gender gap. The point to be focused on here is the context and need of the item being offered.
Cycles do not feature in the basket of necessities for households, let alone girls, in our country, yet it is a fact that girls still often drop out of school after primary education. Of the several reasons for this, the location of high school or higher secondary school being far from their villages, lack of public transportation, fear of being attacked or abused, and inherent patriarchy all add up to the reasons for girls being denied education. Unlike monetary incentives, cycles not only acted as a direct incentive but also enhanced the mobility of rural girls, who were often expected to remain indoors once they reached puberty. With cycles came mobility that was until then denied to girls, giving them the opportunity to get educated and move around not only in their villages but also up the socio-economic ladder.
Similarly, free or subsidised ration does have the direct impact of helping people out of prolonged hunger and starvation. But there exists a spill-over effect for subsidised ration. With the money saved on foodgrains, the added purchasing power that the people have could be used for better education or health, especially at a time when health expenditure and health concerns are on the rise. It also helps in taming food inflation and thereby helps the economy remain stable.
What qualifies to be a welfare policy and what qualifies to be a freebie can only be determined by analysing their impact on the lives of beneficiaries. If the general welfare of the people has increased, there's no reason for terming them freebies and trying to put a stop to them. The definition of poverty has travelled a long way from lack of basic sustenance to the inability to live a dignified life which also includes capability enhancement and the freedom to exercise them. When general consensus is building on this idea of development, how can any measure by the government that enriches the capability of the people and helps them live a dignified life be termed an unwanted or unproductive freebie?
The major opposition against the freebie culture is the pressure it adds to government spending and widens public debt. The fiscal deficit of the country has been increasing lately. The concern about fiscal deficit and increasing public debt is not to be overlooked.
Freebies come under revenue expenditure. As the Fiscal Responsibility and Budget Management (FRBM) Act requires states to eliminate revenue deficit, states have limited resources to spend on revenue expenditure, whereby those available for freebies will be restricted.
The Opposition has criticised the Union government for breaching the FRBM norms, while the state governments have mostly followed the fiscal discipline demanded. Isaac writes, "…during the period 2010-11 to 2016-17, the average fiscal deficit of the states to GDP was only 2.48% while that of the central government was 3.16%. In 2017-18, the Centre's fiscal deficit-to-GDP ratio – even after window dressing by including GST cess, States' share in IGST as Centre's revenue and by forcing cash-surplus ONGC to foot the bill of disinvestment of HPCL Ltd., taking disinvestment proceeds to Rs 91,257 crore – was at 3.5% of GDP."
He adds that it is the Centre that has been fiscally imprudent and contradictory in its own policies. This again highlights the undue advantage of the party in power at the Centre while stricter restrictions are being imposed on state governments.
Revenue expenditure does not create capital assets that guarantee income in the future. However, spending money on welfare policies, especially when trying to recover from a pandemic-induced recession, is not a cause to complain. What requires concern is not the amount being spent on welfare but the crores spent on vanity projects, statues, temples, and pilgrimages. While one can always argue with the probable revenue that it may raise by ways of tourism, the necessity and productivity arguments that feature in freebie debates not entering into these expenses are puzzling.
"Fiscal prudence ultimately depends on revenue raising also. In 2019, Rs 1.6 lakh crore concession was given to the corporate sector. If you raise more resources, you can allot much more to welfare measures. Our direct tax collection is only 6% of the GDP, which is one of the lowest in the world. If the Centre could raise more, say, through a wealth tax, we would have more to spend on welfare. Even a wealth tax of 1% on stock market capitalisation alone will give Rs 2.5 lakh crore," said Kumar in a conversation with NewsClick.
In March 2020, the Union government launched the Production Linked Incentive (PLI) scheme to boost the electronic manufacturing sector of the country. Under the scheme, subsidies as high as 50% were offered primarily to manufacturers of electronic goods ranging from nanochips to drones and were later extended to fourteen sectors, including automobiles, steel, and pharmaceuticals. Oligarchs benefited considerably through the scheme, and in fact, it helped them grow their wealth manifold. While crores of rupees are subsidised for the richest in incentive schemes, welfare policies for the basic sustenance of the poor are under the scanner.
Money being spent on the development of people is never a bad investment. Human development ought to be the ultimate aim of any government. While neoliberal governments are in favour of spending borrowed money for capital investments hoping for a questionable trickle-down impact, the pandemic showed us the importance of higher direct spending on education, health, and social infrastructure of the country.
It is ironic that a party that allegedly has been freely engaging in horse trading post-elections is now complaining about voters being lured by promises of freebies. The blatant misuse of power and resources in trading democratically elected members of legislatures affects the sanctity of democratic elections more than the offers of better lives and livelihoods for the people.
The recent hullabaloo on freebies by the party that has been in power for eight years can only be seen as an attempt to cover the incapability of the government to address structural issues. Indian measures of poverty estimates are under much scrutiny and criticism. According to the 2011 data, more than a fifth of the population is in absolute poverty. The report on the Multidimensional Poverty Index recently released by the NITI Aayog, which takes into account the people's education, health, and standard of living, gives a vivid idea of poverty.
Multidimensional Poverty Index
Sourced from Multidimensional Poverty Index Baseline Report, NITI Aayog, 2021
A closer look at the indicator-wise contributors to MPI gives a clearer picture of poverty beyond income measures. The debate on whether or not freebies are required or what constitutes a freebie cannot easily be concluded.
According to The State of Inequality in India Report released by the Government of India, a monthly salary of Rs 25,000 is among the top 10% of incomes earned. This points toward the alarming level of inequality that exists in our country. As mentioned earlier, the denial of what may seem to the privileged as an unwanted and unproductive investment may be a source of lessened productivity and poorer living standard for many others.
A recent study by Azim Premji University and the National Consortium of Civil Society Organisations on NREGA and Collaborative Research and Dissemination has shown that nearly 80% of the income loss of the people during the pandemic was abridged by MGNREGA. The Mahatma Gandhi National Rural Employment Guarantee Act was a poll promise by the Congress-led United Progressive Alliance in 2004 to eradicate unemployment and in recognition of people’s right to work. This scheme has brought significant visible changes in people’s lives, and the agency has now termed it a freebie. While the possibility of the BJP government ending the programme is speculated in various circles, people are demanding more work days, especially at a time of increasing unemployment.
Likewise, almost all welfare schemes that have impacted the lives of millions of people and their future generations, be it free or subsidised ration, housing, drinking water, employment, education, insurance, and so on, were, in fact, poll promises made in the manifestos released prior to various elections by various political parties at the central and state levels. Tagging welfare schemes as freebies may ultimately put an end to the livelihood of millions of people who are on the verge of subsistence and survival.
“We can see from the BJP government’s track record that they have been unable to manage inflation, unemployment, and growth – the very things that people need. They have only managed to promote Hindu-Muslim divisions and attacks on minorities. They are a disaster when it comes to the economy,” said Gowda.
Poverty is not a choice. People are poor because of the structural flaws that exist in society and the economy. The primary objective of any government should be the welfare of its people. The neoliberal idea that tries to keep state intervention away from the market will only worsen the situation of the common people.
“People should not come to the belief that nobody cares for them, that they should take arms and join the Naxals,” remarked Gowda.
The whole debate on ‘freebie’ culture conveniently forgets the structural issues that make us assume that people vote for the party that offers the most. In fact, in a democracy, the choice of people, whatever they are based on, is the ultimate. And it is the duty of the government to offer a decent standard of living, a dignified one, to its people. Electing the party that offers them the most is a rightful choice offered in a true democracy.
The writers are independent journalists. The views are personal.
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