A standout feature of this year's vote-on-account presented by Finance Minister Nirmala Sitharaman was that it did not indulge in populism, a characteristic trait of outgoing regimes shopping for votes. And this despite her government facing a two-term anti-incumbency. On the face of it, this is a serious break from political precedence.
In fact, in the run-up to the 2019 general election, the same Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA), under pressure from a feisty opposition campaign, had announced an annual stipend for the small and marginal farmer under PM-Kisan and income tax sops for the middle class. Similarly, in the run-up to the 2009 general election, the Congress-led United Progressive Alliance (UPA) had announced a politically game-changing Rs 60,000 crore farm loan waiver.
Good Sense, Finally?
The obvious question is whether the Finance Minister is signalling a structural break.
The optimist in me believes that good economics is finally trumping bad politics. We will know for sure only when the next round of elections comes. Yet, it can be safely argued that the circumstances are changing. Not only is there growing judicial scrutiny, there is a growing debate within government, and, of course, the growing realisation of a rapidly trading up electorate, that freebies are not sufficient to fulfil their aspirations.
Two years ago, the Supreme Court had called out reckless populism, calling it a "serious issue of national importance." It asked the union government to come up with a plan to address this malaise. "The issue before us is the way freebies are given to bribe the electorate. Even if the EC (Election Commission) issues model guidelines, it is of no value; the government must put its stand before the (Supreme) Court," the Supreme Court stated.
Coincidentally, a fortnight earlier, Prime Minister Narendra Modi launched a broadside against electoral populism, calling it "muft ki revadi". Launching the 300-km expressway in Bundelkhand, Uttar Pradesh, PM Modi warned that unchecked, this trend could jeopardise growth and thereby future job prospects of the youth. In his inimitable style, PM Modi positioned freebies as a trade-off with development-one coming at the expense of the other.
Freebies are not sustainable, he said in a veiled reference to the Aam Aadmi Party (AAP), which has made such electoral inducements a key part of its stunning landslide wins-twice in Delhi and recently in Punjab-by offering free electricity (300 units) and drinking water, among other things.
Freebies Aren't Free, Nor Do They Ensure A Win
Interestingly, N.K. Singh, the former revenue secretary who was serving as the Chairman of the 15th Finance Commission (FFC), also joined the debate over freebies. Delivering the annual address at the Delhi School of Economics two years ago, when he was still the chairman of the FFC, he said, "It is not how cheap the freebies are, but how expensive they are for the economy; for life quality and for social cohesion in the long run. We must dread the thought of replicating the culture of competitive freebie politics."
To be sure though, freebies are neither a necessary nor sufficient condition for winning electoral battles. Not just AAP, but the Congress, as well as the BJP, have in the recent round of state elections drawn a blank despite offering generous incentives to the electorate.
Essentially, it is one of the many factors that influence the final political outcome. Which is what is worrying. While it can't guarantee a win, it eventually entails a huge cost on the state exchequer. For instance, the Congress, which won in the Karnataka state assembly elections, is forced to earmark Rs 52,000 crore annually to fund its electoral promises.
From 'Entitlement' To 'Empowerment'
Which brings us back to the vote-on-account, where the NDA signalled a break from political convention. In her post-budget interview with Doordarshan, the Finance Minister was categoric that populism no longer had a place in the governance lexicon of the NDA. And further, that as part of the strategy, their regime had enabled a pivot from entitlement-pursued by the UPA-to one of empowerment. That is, teaching people how to fish rather than give them fish.
"Our honourable President (Droupadi Murmu) said in her speech in the opening session for the current year: 10 years of substantial systemic reforms, 10 years of taking the route of empowering people and not going by entitlement. That is why when houses reach people, electricity reaches people, you also have money coming through Direct Benefit Transfer; you financially empower them. You also make sure that opportunities are given to them. So the mantras that we used - 'sabka saath sabka vikas', looking at making sure that you don't differentiate between beneficiaries on any other score-ensure there is actual development reaching the ground."
Indeed, the Finance Minister will be held to her word, if, as the NDA has proclaimed, they return for a record third term and she is back in North Block. Till then, we can comfort ourselves with the thought that the country is finally debating the idea of electoral freebies. It is no longer the untouchable third rail of Indian politics.
(Anil Padmanabhan is a journalist who writes on the intersection of politics and economics.)
Disclaimer: These are the personal opinions of the author.