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Delhi's Freebie Economy: Welfare, Politics, and the Price of Popularity

The Aam Aadmi Party (AAP) has redefined governance in Delhi through a model centered on extensive freebies and welfare schemes. These programs, ranging from free electricity and water to direct cash transfers for women, have become synonymous with AAP’s political identity and a key driver of its electoral success. This article examines the structure, impact, and controversies surrounding Delhi’s freebie model.

The Genesis and Expansion of AAP’s Freebie Model

The AAP government, which came to power in 2015, initially introduced flagship schemes that became the foundation of its welfare model. These included:

• Free Electricity: 200 units of free electricity per month for all households, with a 50% subsidy for the next 200 units.
• Free Water: 20,000 liters of free water per month for all households.

These schemes were rolled out within the first year of AAP's tenure. The government later expanded its portfolio significantly, particularly in the lead-up to the 2020 and 2025 assembly elections. Promises turned into implementation, with a focus on social welfare and direct financial assistance.

The Schemes: A Detailed Look

The freebie ecosystem is broad and covers various demographics:

• Mukhyamantri Mahila Samman Yojana: A direct cash transfer scheme for women. The scheme provides Rs 1,000 per month to women from households earning less than Rs 3 lakh annually. AAP announced a plan to increase this to Rs 2,100 per month if re-elected in 2025.
• Sanjeevani Yojana for Senior Citizens: Free healthcare for residents aged 60 and above, covering medical expenses in both government and private hospitals, with no income restrictions.
• Free Public Transport for Women: Free rides for women in Delhi Transport Corporation (DTC) buses and Delhi Metro trains, announced in 2019 and implemented ahead of the 2020 elections.
• Welfare for Auto Drivers: A comprehensive package including life insurance (Rs 10 lakh), accident insurance (Rs 5 lakh), and financial assistance for daughters' weddings and uniform costs.
• Doorstep Ration Delivery: A service to deliver subsidized rations to residents' doorsteps.
• Free Pilgrimage for Senior Citizens: A promise to provide free pilgrimage to 1 million senior citizens.

The timing of these announcements, often just before elections, underscores their political significance as voter magnets.

The Financial Toll: A Fiscal Analysis

The most compelling data on the freebie model comes from its financial impact. A sharp increase in Delhi’s subsidy bill is central to understanding its economic consequences.

• Overall Subsidy Surge: Delhi’s subsidy bill has surged by approximately 607%, from Rs 1,554.72 crore in 2014-15 (under President’s Rule) to Rs 10,995.34 crore in the current financial year (2024-25).
• Power Subsidy Ballooning: This is the most significant component of the freebie bill. The power subsidy was Rs 291.94 crore in 2014-15. It rose dramatically to Rs 1,442.76 crore in 2015-16 after AAP introduced its flagship free power scheme—a 394.2% increase in a single year. The subsidy has continued its upward trajectory, ballooning to Rs 3,600.50 crore in 2024-25, a 1,133% increase over the decade.
• Budget Allocation: In the 2024-25 budget, the Delhi government allocated around Rs 6,327.75 crore for freebie schemes, which is approximately 8.3% of the total budget of Rs 76,000 crore. This is a significant increase from around 5% in the previous year.
• Projected Revenue Deficit: This unsustainable spending trajectory has led to projections that Delhi will slip into a revenue deficit by the end of 2025-26, the first time in three decades.

The high court has also taken notice of this fiscal prioritization, reprimanding the government for spending on "freebies" while neglecting critical infrastructure, such as hospital completion and flyover repairs. The court stated that the administration was "neither collecting nor spending any money for the city’s development."

Political Strategy: The Vote-Bank calculus

The freebie model is deeply intertwined with AAP’s political strategy. It is presented as a "blessing" to the people, particularly women, rather than an expense. The narrative focuses on empowerment and support for household management, framing the schemes as investments in families and the future of the nation.

• Electoral Success: The freebies model has been a cornerstone of AAP’s electoral victories. The 2020 assembly election win was attributed, in part, to the credibility built by delivering on initial freebie promises and the addition of new schemes. This model was also a key factor in AAP’s success in the Punjab elections in 2022.
• Rival Party Adoption: The popularity of these schemes has influenced national politics. The Congress party in Karnataka adopted a similar strategy (including free bus rides for women) as part of its "five guarantees" and won the state elections in 2023.

The leader of AAP, Arvind Kejriwal, has defended the model against criticism of populism. He has referred to himself as a "magician" who knows "where to get money from, where to save it, and where to spend it," emphasizing his commitment to fulfilling his promises.

The Future Under a New Government: The BJP’s Dilemma

After AAP’s loss in the 2025 Delhi assembly elections, a key question was the fate of the existing freebies under the new Bharatiya Janata Party (BJP) government.

• BJP’s Stance: The BJP, in its election manifesto (Sankalp Patra), committed to not discontinuing existing welfare schemes. Furthermore, it promised to introduce new welfare programs. One of the first anticipated moves is the implementation of the Ayushman Bharat Yojana in the first cabinet meeting, providing free treatment up to Rs 5 lakh, with the state adding another Rs 5 lakh for low-income families.
• Expert Opinion: Political and economic experts believe it is unlikely that the BJP will discontinue AAP’s freebies. Instead, they anticipate potential additions to the welfare schemes, making it a continuation with modifications rather than a complete overhaul. Discontinuing popular schemes would be politically risky.

Conclusion

Delhi’s freebie model, spearheaded by the AAP, represents a unique experiment in public welfare financed by the state. It has achieved significant electoral success and has been widely imitated. However, the sharp increase in the subsidy bill and the projection of a revenue deficit highlight the potential long-term economic risks of such a model. The new BJP government faces the challenge of balancing fiscal prudence with the political necessity of maintaining or even expanding these popular schemes. The trajectory of Delhi’s freebie economy will be a critical test case for the sustainability of state-sponsored welfare in India.

Sources

1. Delhi govt spending only on freebies, not infrastructure: HC
2. List Of Existing Freebies AAP-Led Govt Is Giving In Delhi
3. Free power, water, travel and more: Delhi subsidy bill up 600% in 10 years
4. Freebies, cash and lots of personal touch: Kejriwal's campaign cocktail for Delhi
5. Unravelling AAP's freebie model
6. Will BJP Govt In Delhi Continue With AAP Freebies? Here Is What Experts Say