The politics and economics of poll promises

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In February 2019, when the Narendra Modi government announced a Rs 6,000 gift to small and marginal farmers, a palliative rather than a cure for agricultural distress ahead of the 2019 general election, it was hailed as a masterstroke. Politics. But when opposition parties announce similar plans ahead of assembly elections, they are branded as ill-considered giveaways and questions are raised about their financial feasibility. That the BJP is following a double standard in pledging handouts is quite evident from the fact that in poll-linked Himachal Pradesh and Gujarat, it is not just Congress and the Aam Aadmi Party that have made handout pledges. gifts to voters, but also the BJP.

The question of whether freebies constitute social assistance or a tool to vote has been at the forefront of political discourse since July, when Prime Minister Narendra Modi called the same thing “revadis”, sparking a bitter debate over politics and the feasibility of populist promises on the eve of the elections. . It is difficult to say whether this is yet another masterstroke by the Modi government to stir up a debate on the issue of public finances under the guise of political giveaways. But the debate has taken on serious dimensions with the Supreme Court and the Electoral Commission also joining the issue by questioning the justification for the gifts.

While Mr Modi has repeatedly raised apprehensions about the growing tendency of governments and political parties to promise freebies, it is important to ask whether the culture of freebies is a political issue, an economic issue, or both. Equally important is whether election-motivated gifts are empowering or seductive. The gift debate is contentious because there is no clear delineation between a gift and a welfare program, as what is a gift and what is not is subjective and open to interpretation. . When the free ration program for 80 million people – which has been extended twice – is seen as a welfare measure, can free education and free health care for the poor be considered freebies?

On August 23, during a public interest litigation hearing by lawyer Ashwini Upadhyay, a BJP supporter, seeking actions against political parties for promising handouts during the elections, the former judge in India’s leader NV Ramana stressed the need to define whether a promise made by a politician was a “freebie” or a “welfare scheme”. On Aug. 26, the Supreme Court returned the motion to a three-judge bench, which it said would review the Supreme Court’s 2013 ruling on the matter. Interestingly, the Electoral Commission, reversing its earlier position that it would stay away from the giveaway debate, proposed that political parties making campaign pledges be required to provide authentic information to voters to assess financial viability. of their promises.

The Aam Aadmi party, while opposing the ban on political parties promising gifts, told the CS that “the socio-economic welfare programs of the deserving and disadvantaged masses cannot be called gifts”. Other opposition parties, including Congress, are also of the view that “helping the poor cannot be called gifts”. In the view of the AAP, Mr. Upadhyay’s “advocacy is clearly aimed at legal action against a particular model of economic development by exclusively targeting tax expenditures on socialist and welfarist measures for the masses”, while ignoring the ” huge tax losses to the Treasury caused by tax refunds, subsidies and other such gifts to major industries and corporations by the Center and various state governments”.

This is a fair point, given that when industries and businesses receive tax refunds and subsidies or their loans are forgiven, few eyebrows are raised. But when farmers are promised loan waivers to deal with agricultural distress, they are called giveaways and labeled fiscally disastrous. Similarly, when the Center gives incentives to stimulate private investment, there is no question about where the money comes from. This raises an important question: in an unequal society like India, should the burden of improving the fiscal health of a nation or state be placed solely on the underprivileged masses?

Given that India is still a mixed economy with a system that combines both welfarist and capitalist development models, it is unfair to consider aid to the poor as gifts, while low interest rates allow businesses to get cheap loans or a corporate tax cut are seen as prudent political decisions. Blaming socialism for India’s poverty, and by extension the handouts, is the result of three decades of operating within the dominant discourse of market capitalism. Therefore, instead of focusing primarily on the so-called freebies, the real debate should be about how to improve the lives of the poor and marginalized, how to invest in education and health, and how to generate more income for the states.

It is undeniable that the dire budgetary situation of states is a very serious problem that requires urgent attention and corrective measures through financial actions. While the high frequency of elections in India provides opportunities for political parties to indulge in competitive campaign pledges, freebies alone are not the reason for states’ deteriorating financial situation. Political parties are right to say that they have the right to project their economic and political policies and priorities before the voters.

From a welfare perspective, not all gifts are unjustified. But when the argument is framed as freebies versus fiscal stability, it’s easier to view all freebies as unjustifiable and fiscally unsustainable. The big question is: why do political parties have to promise concessions to the poor before every election? The answer lies in the failure of our economic policies to create decent livelihoods for the vast majority of Indians.

The writer is a top freelance journalist based in Mumbai. He tweets at @ali_chougule

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