Can government freebie promises be banned in India: SC raises concerns

Five kgs of rice, a laptop, a cycle, a 2- BHK flat etc., all these for free free free! You might have heard this from various political parties during election campaigns for the vote bank. So, are these “fokat ka maal ya muft ka tohfa?”. These are nothing but actual government freebies, in simple words, any goods or services that the government offers to the citizens for free. Freebies can include both free goodies or a scheme offering services for the people. There are several other examples of freebies distributed by the political parties in many states, such as the free DTC buses in Delhi, 1 lakh rupees to newly wedded brides in poor families in Telangana and a bunch of last-minute schemes by the Rajasthan Government etc. 

In this article, we will discuss the meaning of freebies, are they actually beneficial for us? Are freebies really free? Are they similar to government welfare schemes and subsidies and Supreme Court’s concern over it?

What are Government freebies- Are they beneficial?

On the one hand, when the state is unable to provide necessities like clean drinking water, electricity, a clean environment, proper hygiene facilities etc., the voter will take whatever is being offered. But does this really work? 

Freebies offered by the government at the last minute of an election for appeasing votes may or may not work, as, from past experiences, it can be witnessed that these days the voters are not easily influenced by such a ‘promise of largesse’. Even after such free goodies or schemes are given, the election results can go south and not be in favour of the party. So; 

• Rather than just distributing free goodies and then later not keeping up with their promises, it is advisable that bringing any progressive welfare schemes or programmes during the first three years in power will be very well received by the voters and eventually be a positive endorsement of the ruling party. 

• We are not just lecturing on it, but rather this trend has worked in reality say for example Nitish Kumar’s government in Bihar, surprisingly Jayalalithaa winning a second term in Tamil Nadu, elections won by Dr. Raman Singh in Chattisgarh (2013) and the image of the AAP government in Delhi.

So, it can be said that the Indian voter has matured over the years and doesn’t get swayed that easily lured by such freebies.

Are government freebies and subsidies the same?

Many people confuse freebies with other progressive government schemes and subsidies, but they are different. A government scheme and subsidy are different from a freebie. A major proportion of the Government’s revenue comes from taxes. Let’s understand it this way, 1 Rupee = 100 paise, so for every rupee that the Central Government earns or receives, 68 paise comes from taxes. The Government uses a share of this earning (68 paise, herein referred to as an example) to pay the interest on loans that it has taken. While the remaining share is spent on several other things like the defence and security of the country and, it is also used to pay the salaries of government employees as well as subsidies & other schemes.

Are the freebies really “free”?

• These schemes, including healthcare, education and social security or the free goodies, are all fixed, and a part of the government’s total expenditures (purchase of these goods & services) comes from this only. 

• State governments implement these schemes, but money is taken from the Centre, and the Centre earns this money from our taxes. 

• So, here it’s us who are ultimately paying by way of taxes. That’s why freebies are usually criticized on the basis that it drains the treasury. 

• Apart from this, the government also pays for non-recurring expenses (projects that have to be paid for only once), say, for example, the construction of schools, hospitals, roads etc. 

Hence, we can derive that although it seems that you are getting these services for “free”, the government pays for them with your taxes. 

What are subsidies- are they free?

Similarly, the government also uses tax revenues for subsidies as well. Subsidies are discounts on certain essential items for the public, say LPG cylinders, food, education etc. Out of these, the LPG subsidy is the most common for every household in India. Once PM Modi even requested the Indian citizens to give their subsidies so that the extra revenue could go towards the welfare of the rural and poor.  

Thus, if people who can afford LPG give up their subsidies, it means that the said extra revenue could go toward welfare for the poor. So, if we give up our subsidies, it is being paid to the poor using the tax revenues only.

It is fashionable these days to criticize government freebies, and it is not the same as subsidies or other welfare schemes.

SC’s stand on Freebie Culture in India

In 2022, after the State Governments announced over Rs 1 trillion in welfare schemes and subsidies this year, the Supreme Court raised questions over freebies promised around elections.

The Supreme Court, in January 2022, issued notice to the Centre and Election Commission of India on the plea filed by Advocate Ashwini Upadhyay. In its response, the Election Commission of India stated that it has no power to regulate the same or take action against parties making such poll promises. 

• The ECI said that “offering/distribution of any freebies either before or after an election is a policy decision of the party concerned, and whether such policies are financially viable or its adverse effect on the economic health over the state is a question that has to be considered and decided by the voters. The Election Commission of India cannot regulate state policies and decisions which may be taken by the winning party when they form the government.”

• Why is the Centre hesitating to take any stand on this? On a plea filed by Ashwini Upadhyay seeking directions to regulate the excessive distribution of freebies by political parties using public money, the SC comprising Justices Krishna Murari, Hima Kohli & CJI N.V Ramana asked to consult the Finance Commission whether it is possible to check this by regulating the allocation of revenue to states. (as the money used by states on these freebies or schemes comes to form the Centre, which in turn is dependent on the taxes).

Can promises of freebies be banned?

Intervention by the ECI in banning promises for freebies can amount to judicial overreach. However, distributing excessive freebies or promises for vote banks can be challenged in court, analogous to bribery (Section 171E) and undue influence at elections (Section 171C) under the IPC (Indian Penal Code) and Section 123 of the Representation of People’s Act, 1951. 

Conclusion

Prime Minister Narendra Modi warned that this freebie culture in politics could cost us long-term development. This warning was amplified when the Supreme Court asked renowned Attorneys such as Kapil Sibbal and K.M. Nataraj to demand a clear-cut answer to take a stand on whether freebies should continue or not? In short- a progressive government scheme and subsidies are valid, but the distribution of government freebies is highly questionable as more freebies would mean more tax to burden the taxpayers.