- This is one phenomenon that keeps playing every time an election is on the horizon. Not for nothing, the Indian elections are termed as Dance of Democracy with all accompanying paraphernalia usually associated when political leaders, cutting across party affiliations, go about luring the electorate. How they do is no secret either as incentives, inducements, assurances, promises, freebies, goodies, and in-kind dole-outs are offered on a platter to woo the electorate. Forget about the fiscal prudence and economic sense as what matters, in the end, is to consolidate the vote banks in whatever way possible.
PC: Hamiisi J Nsubuga
- Since some of the most crucial states are lined up for the assembly elections, the political leaders are out with their tested policy of luring the voters again. Looking at the temptations on offer with mouth-watering sops would make many yearn for more. The latest to join the growing tribe of sop inducers is none other than the Punjab Congress chief promising financial incentives ranging from Rs. 5,000 to Rs. 20,000 for girl children in Classes 5 to 12, free e-scooters for female college-goers, and interest-free loans for their higher studies besides Rs. 2,000 per month for women homemakers.
- As you are aware, the Aam Aadmi Party earlier had made announcements in Punjab, Goa, and Uttarakhand promising Rs. 1,000 per month for all women. In Uttar Pradesh, Samajwadi Party adapted AAP’s playbook by announcing free electricity for irrigation and the first 300 units free for households. The Bharatiya Janata Party, despite governing at the Centre and in most poll-bound states, boasts significant cash bonanzas transferred in UP, an Rs. 2,000 PM-Kisan tranche, Rs. 1,000 crores for self-help groups targeting around 16 lakh women, Rs. 1,100 to primary school students for buying school gear, and Rs. 2,000 to 1 lakh girl children.
- No denying the fact that some cash transfers are good policy, the PM-Kisan being an apt example. Of course, some freebies like Tamil Nadu’s Amma Canteens indeed addressed a real need. Nonetheless, most are just cash thrown at groups with no or little positive impact. Mind you, some cash for girl students will help far less than more education options as many freebies have massively distortionary effects. We all know how the election-eve-free electricity scheme for tubewell owners in Punjab in 1996 institutionalized a policy that dangerously depleted groundwater, encouraged paddy cultivation, and greatly vitiated not just farm economies but also air quality as well as power discoms’ viability.
- The lop-sided policy continues to create nuisance even now speaks volumes about the futility of pursuing ham-handed counterproductive freebies. Most worryingly, many states have dodgy finances and are always seeking more central support. A case in point is some states asking that the GST compensation scheme be extended for another five years beginning 2022. Moreover, often fiscal constraints force governments into cutting corners elsewhere or raising new taxes when politicians carelessly go about promising sops. Needless to mention, states doling out unviable sops will only end up hurting citizens down the line. For all that you know, those freebies and goodies may not even win you the election. Will the politicians think rationally and act prudently? Your guess is as good as mine.