Indias Freebie Culture Political Promises And Economic Realities

In the landscape of Indian politics, freebies have become a prominent strategy for political parties to attract voters. These offerings range from cash transfers and free electricity to laptops and household goods, often implemented as welfare programs or election promises. The practice has evolved significantly over the years, with substantial implications for India's economic and democratic systems. This article examines the phenomenon of freebies in India, their economic impact, and their role in political campaigns.

Definition and Types of Freebies in India

Freebies in India are defined as goods and services provided without any charge to users, typically aimed at benefiting targeted populations in the short term. The Reserve Bank of India (RBI) has characterized these as public welfare programs offered without cost. Unlike public goods such as health and education, which provide long-term benefits, freebies generally offer immediate relief or benefits.

Common examples of freebies in the Indian context include: - Free laptops and smartphones for students - Cash transfer schemes for women and specific demographics - Free electricity and water for households below certain income thresholds - Free bicycles for schoolgirls - Free food grains through the Public Distribution System - Household items such as televisions and cooking gas

These offerings serve dual purposes: addressing immediate needs of the population while simultaneously functioning as political tools to garner voter support during elections.

Evolution of Freebie Politics

The practice of distributing freebies in India has deep historical roots, extending beyond contemporary political figures. As noted in the source material, "This story doesn't begin with Modi or Kejriwal," indicating that freebies have been part of Indian political culture for decades.

Over the past 50 years, India has witnessed increasing subsidies alongside decreasing poverty levels. On paper, this appears to be a success story in poverty alleviation. However, the practice has evolved from welfare measures to what critics describe as sophisticated vote-buying mechanisms.

The period between 2017-2021 saw a significant expansion of state subsidies, which tripled from ₹1.87 lakh crore to ₹4.44 lakh crore, representing 26% annual growth. This substantial increase highlights the growing importance of freebies in political strategy and governance.

Economic Impact of Freebies

The economic implications of freebies in India are substantial and multifaceted. The rapid expansion of subsidies has placed considerable strain on state budgets and, consequently, on taxpayers.

Fiscal Burden

State subsidies have grown exponentially, with figures showing a tripling from ₹1.87 lakh crore to ₹4.44 lakh crore between 2017-2021. This 26% annual growth rate has placed significant pressure on state finances, with middle-class taxpayers increasingly bearing the burden of funding benefits for approximately 80 crore Indians.

Regional Variations

The economic impact of freebies varies across different states: - Punjab, already the highest indebted state, faces additional pressure from freebies worth ₹55,000 crore, which is driving it toward bankruptcy. - In Karnataka, election guarantees worth ₹62,000 crore (3 percent of GSDP) are creating similar fiscal challenges. - States like Rajasthan, Chhattisgarh, Jharkhand, and Himachal Pradesh have reverted to the Old Pension Scheme (OPS), which imposes an indefinite pension liability upon the states. According to an RBI study, the burden of the OPS upon the exchequer is 4.5 times higher than that of the New Pension Scheme (NPS).

Funding Challenges

The funding of freebies raises questions about financial sustainability. With only a quarter of the annual income of major political parties like the BJP and Congress coming from declared sources and reflected in tax returns, the financial mechanisms behind many freebie programs remain opaque. Anonymous cash donations running into billions of rupees are seen at the heart of India's endemic corruption, complicating the economic analysis of freebie programs.

Case Studies of Freebie Implementations

The effectiveness of freebies as a political strategy varies widely across different contexts and time periods. Several case studies illustrate this inconsistency:

Madhya Pradesh (2023)

In December 2023, the Bharatiya Janata Party government in Madhya Pradesh won a landslide victory against expectations, with many crediting this success to the Ladli Behna Yojana — a cash transfer scheme for women. This example demonstrates how targeted freebies can influence electoral outcomes.

Rajasthan and Chhattisgarh (2023)

In contrast to Madhya Pradesh, similar populist approaches did not help Ashok Gehlot in Rajasthan or Bhupesh Baghel in Chhattisgarh during the same election cycle. This inconsistency highlights that freebies alone do not guarantee electoral success.

Telangana

In Telangana, KCR Rao won a landslide victory in 2018 through a combination of massive irrigation projects and substantial cash transfer schemes. However, the same cash transfer schemes failed to secure him a third term in 2023, suggesting that the effectiveness of freebies may diminish over time or require constant innovation.

Uttar Pradesh

Chief Minister Akhilesh Yadav famously distributed free laptops to 1.8 million students, along with other populist schemes including cash transfers. Despite these efforts, he lost badly in 2017. Five years later, the biggest issue in favor of Chief Minister Yogi Adityanath was free ration, demonstrating how the political context and timing influence the reception of freebies.

Delhi

Free electricity for the poor—up to 200 units—was so popular in Delhi that Arvind Kejriwal's Aam Aadmi Party won a second consecutive term with a 3/4ths majority in 2020. The success of this initiative led many states to copy the idea, though with mixed results.

Punjab (2022)

In Punjab, Chief Minister Charanjit Singh Channi's attempt to waive electricity and water bills could not save the Congress from a rout in the 2022 elections, further illustrating the unpredictable nature of freebie politics.

Arguments For and Against Freebies

The debate surrounding freebies in India encompasses multiple perspectives, with valid points raised by both proponents and critics.

Arguments Against Freebies

1. Against Democratic Values: Critics argue that in a mature democracy, political parties owe voters good, corruption-free governance rather than freebies. While delivering good governance is challenging, fulfilling promises of freebies is relatively simple.

2. Ignoring Rational Economic Management: Some contend that Indian voters are increasingly attracted to freebie politics rather than rational economic management, a pattern observed repeatedly in states like Punjab, Rajasthan, Chhattisgarh, Jharkhand, and Delhi.

3. Economic Unsustainability: The fiscal burden of freebies threatens economic stability, particularly in states already facing financial challenges.

4. Dependency Culture: Critics warn that excessive reliance on freebies may foster a culture of dependency rather than encouraging self-sufficiency and economic participation.

Arguments For Freebies

1. Poverty Reduction and Social Welfare: Freebies can provide basic necessities to poor and marginalized sections of society. A World Bank study estimated that food subsidies under the Public Distribution System (PDS) reduced India's poverty ratio by 7% in 2011-12.

2. Improved Human Capital Development: Freebies such as bicycles given to schoolgirls in Bihar and West Bengal have been shown to increase enrollment and retention rates, reduce dropout rates, and improve learning outcomes, as reported by NITI Aayog.

3. Health Protection: A National Sample Survey Organization (NSSO) study revealed that health insurance schemes like the Rashtriya Swasthya Bima Yojana (RSBY) reduced out-of-pocket expenditure and catastrophic health shocks for below poverty line households.

4. Economic Growth: Some argue that freebies can stimulate economic growth by increasing the productive capacity of the workforce, particularly when they target education and health.

5. Reducing Inequality: Freebies can contribute to reducing income inequality by redistributing wealth and resources more equitably across society.

The Future of Freebies in Indian Politics

The practice of offering freebies shows no signs of diminishing in Indian politics. With approximately 270 million people—nearly 22 percent of India's population—living in poverty, giveaways remain particularly attractive to voters. However, the mixed results of various freebie implementations suggest that political parties may need to refine their approach.

One potential evolution is the increased digitization of freebie distribution. As noted in the source material, "As digitisation has made cash transfers easy and instant, politicians in power now routinely resort to freebies to try and win elections." This technological shift may increase the efficiency and targeting of freebie programs.

Another possible development is greater regulation of freebie politics. The absence of laws barring such campaign promises has allowed the practice to continue unchecked, but growing concerns about fiscal responsibility may lead to increased scrutiny and potential reforms.

Conclusion

Freebies have become an integral part of Indian political landscape, serving both welfare functions and electoral strategies. The evidence presented in the source material suggests that while freebies can influence electoral outcomes, their effectiveness is inconsistent and context-dependent. The economic impact of freebies varies across states, with some facing significant fiscal challenges as a result.

The debate surrounding freebies encompasses valid concerns about economic sustainability and democratic values, alongside documented benefits in poverty reduction and social welfare. As India continues to develop, finding the right balance between immediate relief measures and long-term economic development will remain a critical challenge for policymakers.

Ultimately, freebies represent just one ingredient in the complex recipe of electoral success. As one source notes, "Freebies have become an essential part of the list of ingredients of election victories — only one of many." The future of freebies in India will likely depend on their ability to adapt to changing economic conditions and evolving voter expectations while maintaining fiscal responsibility.

Sources

1. Freebies Might Be the Best Thing for India (But Here's the Catch)
2. Freebies in India
3. Editorial Analysis: Freebie Politics in India
4. Do Freebies Really Win Elections in India?
5. Difference Between Freebies and Subsidies
6. Freebies: Symbols Funding India's Key Election Features