Why freebies won’t go away

When Prime Minister Narendra Modi called for an end to the ‘revadi’ culture last month, he might not have bargained for the institution of a Supreme Court-appointed expert committee to “study the impact of freebies on taxpayers and the economy”. Or it might even have been a part of the script as he saw it.

The Prime Minister was targeting opposition parties such as AAP (Aam Aadmi Party), the Trinamool Congress, the TRS (Telangana Rashtra Samithi) and the DMK (Dravida Munnetra Kazhagam). All these parties have also been attacked in the past by BJP leaders for distributing freebies and blamed more recently for driving the country towards a “Sri Lankalike situation”.

On the face of it, the Supreme Court was taking a wider view of the problem, and not something endemic to the opposition parties. The court observed that all parties distribute ‘revadi’ (literally, sugar-coated cakes covered with sesame seeds and metaphorically, freebies). When senior advocate Kapil Sibal said the court should leave it to Parliament to decide on ‘appropriate remedial measures’, the bench shot back saying, “Do you seriously think Parliament will debate regulating freebies? Which political party will debate this issue? No party will agree on curbs on freebies ahead of polls. Each of them wants it.” The Prime Minister’s remark on the ‘revadi culture’ had seemingly boomeranged.

Of course, every party is going to tell the committee, “What they give are freebies, what we offer are not.” It will by no means be easy for the committee—which is likely to have representatives of the NITI Aayog, the RBI, the yet-to-be-constituted 16th Finance Commission, the Election Commission and political parties—to define freebies. While BJP might describe an opposition-ruled state’s freebies as a “drain” on its finances, the state might well defend it as legitimate welfare initiatives and an investment for the future. States will also assert their sovereign power to decide how much to spend and where besides deciding what is good or bad for its people. They will also certainly present a long list of freebies offered by the BJP and the Prime Minister himself. The line between welfare needs and poll sops has always been thin.

It is equally certain that some members on the committee, economists and bankers, will offer a different view, driven by concerns on the impact of freebies on public finances and budget deficits. Making welfare schemes being the sole prerogative of elected governments, they can scarcely be told though which of the schemes they should drop. Experts might point to the poor state of finances of states and warn that they might find it difficult to sustain the schemes or repay their debts. But they can hardly ask states to drop welfare schemes which in their view might be wasteful. Time alone can be the arbiter in these cases.

The committee might end up offering broad guidelines on how to regulate spending by the central and state governments. A number of such guidelines already exist to enforce financial discipline. Some of these guidelines, such as Fiscal Responsibility and Budget Management, are backed by laws. The SC committee might suggest some more ways to strengthen fiscal prudence.

At the end of the committee’s exertions, therefore, we might be back to square one with economists, public finance experts and the RBI expressing fears of a “fiscal disaster” and elected governments arguing that they know best how to look after their people and manage their finances. Indeed, Tamil Nadu’s articulate and outspoken finance minister has pointed out that fiscal deficit in his state is far below the deficit of the Union government.

The truth is that the revadi culture is unlikely to end anytime soon. The reason is not far to seek. It’s just that political parties are reluctant or unable to strike at the root of the problem.

There are two sets of actors in the revadi culture: political parties and the people. Political parties distribute revadi to get votes of the targeted population. But why are people willing to barter their freedom of political choice for freebies? It is largely because they desperately need the freebies. Most people do not have a decent enough income to meet the needs of their families; or save enough for the future and live with dignity and with adequate financial security. Do upper and middle classes want freebies? No. They will undoubtedly feel insulted by the remotest suggestion of freebies.

The revadi culture exists among the poor because poverty is widespread and economic disparities are increasing. No national employment policy appears to be addressing the highest unemployment rate in the last 45 years. In June 2022, as many as 44% of youth (20-24 age group) in the country were jobless. In number, that would mean at least 150 million youths. About 10 million workers who were laid off by the manufacturing sector during the pandemic have not been taken back. As many as 8 million people engaged in non-farm sectors lost their jobs in June and July 2022. Out of 220 million candidates who applied for central government jobs in the past eight years, only 722,000 or one per cent of the applicants got jobs. Can jobless and poor Indians be faulted for accepting freebies in lieu of their precious votes?

Revadi seeking is not limited to the jobless, though. Even those who have jobs desperately seek revadis. Why? The conventional wisdom is that if surplus labour moved from agriculture to non-farm employment, it would ensure economic growth, higher wages and better living conditions for the workers. But although there has been a shift from agriculture and migration of villagers to urban centres and despite economic growth, wages and living conditions of workers have not improved. Most of the urban workers (for example, gig workers) have casual, low-wage jobs, with no paid leave, medical reimbursement, social security, accident insurance, provident fund or pension. Can we fault them for trading their votes for revadis?

The onus for ending the ‘revadi culture’, therefore, lies on the Prime Minister, the Union government and all political parties and state governments. They need to ask why the lives of people do not show much improvement, the distress more in some states than others, despite all the tall claims, ambitious roadmaps and public expenditure. Unless a decent income is assured for all, they have little moral right to lecture people on freebies.

(Author is an independent journalist and the author of ‘Against the Few: Struggles of India’s Rural Poor')

(Views are personal)