The debate over “freebies” in election campaigns exposes the tension between populist politics and fiscal prudence. Chief Election Commissioner Rajiv Kumar captured this complexity succinctly, questioning what qualifies as a freebie; an entitlement for one may be an extravagance for another. Addressing the announcement of Delhi's poll schedule, Kumar lamented the lack of “accepted and legal answers” while warning against mortgaging future generations' welfare for present-day political gains. His remarks underline the need for a framework that not only scrutinises the financial sustainability of poll promises but also reconciles welfare priorities with fiscal responsibility
The CEC was right when he said defining a freebie was difficult. It is fraught with philosophical challenges, the first of which lies in the subjective nature of value. What constitutes a freebie often depends on individual perceptions of necessity, entitlement, and utility. For example, some might see free electricity subsidies as essential for marginalised communities, while others view them as unnecessary handouts. This subjectivity creates a tension between the concepts of utility (benefit to the recipient) and entitlement (moral or legal right to receive the benefit). It challenges policymakers to draw a clear line between welfare measures that address inequality and populist giveaways that may lack long-term impact.
A Complex Question
The RBI Bulletin 2022 defines freebies as public welfare measures offered at no cost, such as free electricity, water, public transportation, and utility bill write-offs. However, the RBI draws a critical distinction between these and spending on public merit goods like the Public Distribution System (PDS), employment guarantee schemes, and state support for education and health. Unlike freebies, these merit goods generate economic benefits and positive externalities.
A study by the Centre for Policy Research (CPR) showed the effectiveness of freebies such as laptops, bicycles, and cash transfers in positively influencing voter turnout. These initiatives often resonate with voters, especially in lower-income demographics, as they provide tangible and immediate benefits.
However, while such measures may temporarily improve voter engagement, they risk undermining systemic governance and developmental priorities. Over-reliance on freebies diverts state resources from essential long-term investments in critical sectors like education, healthcare, and infrastructure. This trade-off perpetuates structural deficiencies, ultimately hampering economic growth and human capital development. Moreover, as political parties escalate their promises to outbid competitors, states risk slipping into unsustainable fiscal deficits, leading to potential economic crises.
The competitive populism associated with freebies also shifts the focus of electoral campaigns away from substantive policy debates to a transactional relationship between voters and the state. This dynamic may erode trust in democratic institutions over time, as governance becomes more about immediate gratification than addressing structural inequities or ensuring long-term economic resilience.
Rising Subsidy Costs
Election-driven promises of freebies have led to a sharp rise in subsidy expenditures, as highlighted in the RBI report State Finances: A Study of Budgets 2024-25. This increase, driven by farm loan waivers, free or subsidised services like electricity, transport, and gas, and direct cash transfers to farmers, youth, and women, creates fiscal stress. The report has even recommended that states urgently rationalise these subsidies to ensure that essential productive investments are not crowded out.
But why can't the Election Commission stop political parties from announcing freebies? This is because of a Supreme Court judgement. The Court, in S. Subramaniam Balaji v. The Government of Tamil Nadu & Ors. (2013), held that announcing freebies in election manifestos is not illegal, as such promises cannot be classified as “corrupt practices” under Section 123 of the Representation of the People Act (RP Act). However, the Court acknowledged that these promises significantly undermine free and fair elections by influencing voters, distorting the level playing field, and vitiating the electoral process. Recognising the Election Commission's limited authority, especially for manifestos released before election dates, the Court directed the Commission to frame guidelines under the Model Code of Conduct. It emphasised the need for separate legislation to regulate such practices. While legally permissible, the judgment flagged the moral and ethical issues surrounding freebies, highlighting their adverse impact on democratic integrity and calling for systemic reforms.
A Proposal From 2022
Based on the advice from the judgement, in October 2022, the EC introduced a significant reform aimed at ensuring transparency and fiscal responsibility in electoral promises. The EC proposed requiring political parties to submit a detailed pro forma along with their election manifestos. This pro forma would mandate a granular breakdown of each electoral promise, including the estimated expenditure, targeted beneficiaries, and a clear financing plan to ensure these promises did not destabilise state finances. Grounded in the principle of providing voters with actionable and comparable data, the initiative aimed to address the shortcomings of existing Model Code of Conduct (MCC) guidelines, which often resulted in vague and inadequate disclosures by political parties.
The proposal has not been implemented despite its potential to promote fiscal prudence and deter reckless electoral promises. Resistance from political parties, concerns over constitutional and legal implications, and a lack of consensus among stakeholders have stalled progress. Many political parties argued that such mandates could infringe upon their autonomy and flexibility in addressing voter needs, while others questioned the EC's authority to enforce such measures without legislative backing. As a result, the initiative remains a missed opportunity to instil accountability in electoral campaigns.
It is high time this reform is implemented, as it represents a critical step towards fostering transparency and fiscal responsibility in electoral promises. While it is true that the EC may find it challenging to verify the granular accuracy of the fiscal calculations presented in the pro forma, the very act of requiring political parties to disclose these details introduces an essential layer of accountability. The reform serves as an important nudge against the indiscriminate announcement of freebies that can strain state finances.
A Discerning Public
However, the true challenge lies in addressing the broader issue of public awareness. Voters must understand the real fiscal cost of these promises and how, over the long term, such measures can undermine economic stability and harm the very median voter they are meant to benefit. This requires a concerted effort to educate citizens on the trade-offs involved—such as increased taxes, reduced spending on essential public goods, or ballooning debt—that often accompany populist giveaways.
Bridging this gap in public understanding is indeed a tougher nut to crack as it involves overcoming entrenched narratives and emotional appeals that often accompany populist politics. Nevertheless, the EC's reform, by reducing information asymmetry, provides a vital starting point.
(Aditya Sinha is a public policy professional.)
Disclaimer: These are the personal opinions of the author
