{"id":37681,"date":"2023-09-12T22:14:16","date_gmt":"2023-09-12T16:44:16","guid":{"rendered":"https:\/\/pwonlyias.com\/stage\/?post_type=editorial-analysis&#038;p=37681"},"modified":"2023-11-17T11:42:28","modified_gmt":"2023-11-17T06:12:28","slug":"politics-of-freebies","status":"publish","type":"editorial-analysis","link":"https:\/\/pwonlyias.com\/stage\/editorial-analysis\/politics-of-freebies","title":{"rendered":"Politics of Freebies"},"content":{"rendered":"<p><b>Context:\u00a0<\/b><\/p>\n<p><span style=\"font-weight: 400;\">The Prime Minister recently remarked that <\/span><b>state-provided freebies may yield political results in the short term, but it will lead to a great social and economic price in the long term <\/b><span style=\"font-weight: 400;\">with the poor paying a heavy price.<\/span><\/p>\n<p><b>More about the News:\u00a0<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Webinar Against Freebies:<\/b><span style=\"font-weight: 400;\"> A webinar titled <\/span><b>\u2018Freebies Culture and its Impact on Indian Politics &#038; Democracy\u2019<\/b><span style=\"font-weight: 400;\"> was organised by the Association for Democratic Reforms (ADR) in view of a public interest litigation (PIL) challenging freebies.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>OPS as a Populist Move: <\/b><span style=\"font-weight: 400;\">The choice of certain states to revert to the <\/span><b>old pension scheme (OPS) <\/b><span style=\"font-weight: 400;\">has been criticised as a populist measure to attract government employees.<\/span><\/li>\n<\/ul>\n<table>\n<tbody>\n<tr>\n<th style=\"border-style: solid; border-color: #000000; background-color: rgba(184, 165, 217, 0.53); text-align: left; vertical-align: middle;\"><span style=\"color: #000000;\"><b>Freebies:<\/b><\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400; color: #000000;\">The Reserve Bank of India (RBI) in a bulletin in June 2022 defined \u2018freebies\u2019 as \u201ca public welfare measure that is provided free of charge.<\/span>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400; color: #000000;\">It includes provisions like free electricity, water, public transportation, the waiver of outstanding utility bills, and farm loan waivers.\u00a0<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/th>\n<\/tr>\n<\/tbody>\n<\/table>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><span style=\"font-weight: 400;\">Five states &#8211; Rajasthan, Chhattisgarh, Jharkhand, Punjab and Himachal Pradesh have decided to go back to the OPS.\u00a0<\/span><\/li>\n<\/ul>\n<\/li>\n<li style=\"font-weight: 400;\" aria-level=\"2\"><b>Rise of Populist Policies:<\/b><span style=\"font-weight: 400;\"> Political parties in states preparing for assembly elections have begun pledging freebies, which include cash transfers and supplementary income initiatives.<\/span><\/li>\n<\/ul>\n<p><b>Concerns associated with excessive use of freebies:<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Heavy Tax Burden on States:<\/b><span style=\"font-weight: 400;\"> Many states are burdened with substantial debts, limiting their capacity to invest in more significant welfare programs.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Against Constitutional Principles:<\/b><span style=\"font-weight: 400;\"> Making promises when the states lack money to guarantee fundamental rights and implement directive principles is against constitutional principles.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Shrinkage of Fiscal Space:<\/b><span style=\"font-weight: 400;\"> The subsidy burden needs to be to be funded through debt, which will result in mounting deficits.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Violation of the Principle of a Level-Playing field:<\/b><span style=\"font-weight: 400;\"> Freebies gives the political parties undue advantage by making promises to provide private goods for only a section of voters.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Opportunity Cost:<\/b><span style=\"font-weight: 400;\"> States offering loan waivers often have to cut spending on crucial infrastructure such as roadways development and skill development.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Social Impact:<\/b><span style=\"font-weight: 400;\"> Despite receiving more resources, the RBI&#8217;s study reveals a decline in social sector spending by states, particularly in vital areas like health and education.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Environmental Concerns:<\/b><span style=\"font-weight: 400;\"> States offer free electricity to farmers, leading to overuse of groundwater and the continuation of traditional crop patterns.\u00a0<\/span><\/li>\n<\/ul>\n<table>\n<tbody>\n<tr>\n<th style=\"border-style: solid; border-color: #000000; background-color: rgba(184, 165, 217, 0.53); text-align: left; vertical-align: middle;\"><span style=\"color: #000000;\"><b>Supreme Court response on Freebies:\u00a0<\/b><\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"color: #000000;\"><b>Constitution of an apex body: <\/b><span style=\"font-weight: 400;\">The Supreme Court Bench in a recent judgment proposed it to address the issue of freebies and poll promises.<\/span><\/span><\/li>\n<\/ul>\n<\/th>\n<\/tr>\n<\/tbody>\n<\/table>\n<p><b>Challenges in curtailing Freebie Culture:<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Lack of Regulatory Powers with ECI:<\/b><span style=\"font-weight: 400;\"> The Election Commission of India (ECI) has stated that it lacks the authority to regulate or penalize political parties for making electoral promises.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>No assessment of financial viability of populist policies:<\/b><span style=\"font-weight: 400;\"> Political parties often fail to clarify the funding sources for the promises made in the form of freebies.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Lack of Information to the Voters<\/b><span style=\"font-weight: 400;\">:\u00a0 They don&#8217;t delve into the financial aspects of freebies, prompting political parties to compete for promising freebies.\u00a0<\/span><\/li>\n<\/ul>\n<p><b>Way Forward:\u00a0<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Responsibility of voters:<\/b><span style=\"font-weight: 400;\"> Voters need to be vigilant and inquire about the financial implications of the populist policies.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Empowering the ECI with greater authority: <\/b><span style=\"font-weight: 400;\">Statutory provisions as a backup or warnings on the use of funds are needed.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Model Manifesto:<\/b><span style=\"font-weight: 400;\"> The ECI needs to prepare a Model Manifesto to be followed by all political parties.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Fixing limit of welfare schemes:<\/b><span style=\"font-weight: 400;\"> Fixing spending of 1% of GSDP or 1% of state own tax collections or state revenue expenditure would help to implement welfare schemes properly.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Distinction between freebies and welfare measures:<\/b><span style=\"font-weight: 400;\"> There has to be a distinction between the offer of ornaments, television sets, consumer electronics free of cost and real welfarist offers.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Tracking social sector budgetary allocations:<\/b><span style=\"font-weight: 400;\"> Prioritizing higher resource allocation to welfare schemes is needed.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Role of Finance Commission:<\/b><span style=\"font-weight: 400;\"> It should consider the state&#8217;s debt burden during state allocations, and assess whether the state&#8217;s economy can sustain the financial impact of freebies over the long term.<\/span><\/li>\n<\/ul>\n<p><b><i>News Source:<\/i><\/b> <a href=\"https:\/\/www.business-standard.com\/politics\/politics-of-handouts-freebies-walk-thin-line-between-welfare-and-wasteful-123091000501_1.html\" target=\"_blank\" rel=\"nofollow noopener\"><i><span style=\"font-weight: 400;\">Business Standard<\/span><\/i><\/a><\/p>\n<p>\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Context:\u00a0 The Prime Minister recently remarked that state-provided freebies may yield political results in the short term, but it will lead to a great social and economic price in the long term with the poor paying a heavy price. More about the News:\u00a0 Webinar Against Freebies: A webinar titled \u2018Freebies Culture and its Impact on&hellip; <a class=\"more-link\" href=\"https:\/\/pwonlyias.com\/stage\/editorial-analysis\/politics-of-freebies\">Continue reading <span class=\"screen-reader-text\">Politics of Freebies<\/span><\/a><\/p>\n","protected":false},"author":11,"featured_media":0,"menu_order":0,"comment_status":"open","ping_status":"open","template":"","format":"standard","meta":{"rank_math_lock_modified_date":false,"footnotes":""},"tags":[],"paper-wise":[2084],"subject":[2124],"acf":[],"_links":{"self":[{"href":"https:\/\/pwonlyias.com\/stage\/wp-json\/wp\/v2\/editorial-analysis\/37681"}],"collection":[{"href":"https:\/\/pwonlyias.com\/stage\/wp-json\/wp\/v2\/editorial-analysis"}],"about":[{"href":"https:\/\/pwonlyias.com\/stage\/wp-json\/wp\/v2\/types\/editorial-analysis"}],"author":[{"embeddable":true,"href":"https:\/\/pwonlyias.com\/stage\/wp-json\/wp\/v2\/users\/11"}],"replies":[{"embeddable":true,"href":"https:\/\/pwonlyias.com\/stage\/wp-json\/wp\/v2\/comments?post=37681"}],"version-history":[{"count":4,"href":"https:\/\/pwonlyias.com\/stage\/wp-json\/wp\/v2\/editorial-analysis\/37681\/revisions"}],"predecessor-version":[{"id":53965,"href":"https:\/\/pwonlyias.com\/stage\/wp-json\/wp\/v2\/editorial-analysis\/37681\/revisions\/53965"}],"wp:attachment":[{"href":"https:\/\/pwonlyias.com\/stage\/wp-json\/wp\/v2\/media?parent=37681"}],"wp:term":[{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/pwonlyias.com\/stage\/wp-json\/wp\/v2\/tags?post=37681"},{"taxonomy":"paper-wise","embeddable":true,"href":"https:\/\/pwonlyias.com\/stage\/wp-json\/wp\/v2\/paper-wise?post=37681"},{"taxonomy":"subject","embeddable":true,"href":"https:\/\/pwonlyias.com\/stage\/wp-json\/wp\/v2\/subject?post=37681"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}