Is BJP free from politics of freebies?

By Dr. Santosh Kumar Mohapatra*

Since the inception of neo-liberalism, if something is given to the poor, then it is treated with disdain, labelled as anti-reforms and antagonistic to growth. But if anything is given to rich/corporates- even if on a massive scale- is welcomed as pro-growth by the protagonists of the market economy. Hence, freebies given to the poor have been the centre of controversy for a long time.

A lot of valuable time is wasted debating on freebies, even Supreme Court killed its valuable time instead of discussing many other gruelling problems plaguing the nation. If freebies are affecting the finances of state government as argued by some, a simple solution is to raise more resources by taxing rich/wealthy/corporate behemoths and bear the expenses of freebies. The Centre must tax and distribute resources among states. The Centre must not forget that States’ finances are affected as the former raises more resources through cesses and surcharges in which States have no share.

Further, the tax-GDP ratio of India is one of the lowest in the world for which States are affected as they get less from the Centre. As per the 15th Finance Commission, states should get 41 per cent from the divisible pool but actually, getting only 29 per cent.

What is reprehensible is that when the controversy surrounding freebies is escalating unnecessarily, the Central government, state governments, election commission, and Supreme Court are yet to define what is a freebie, which schemes they consider freebies and what is the difference between freebies and welfare schemes.

Both non-BJP and BJP-ruled state governments, the Central government are floating welfare schemes, giving freebies, though perilously privatising education and health to the detriment of the interest of the masses.

The phrase freebie owes its etymology to 1920s American politics. Freebies mean perks, handouts, giveaways, and sample gifts provided or given free of charge, especially as a way of attracting one’s support for or interest in something. But there is no clarity on how it should be interpreted in policies.

However, some treat populist schemes and subsidies as the same as freebies. This is wrong. A subsidy is a direct or indirect payment, economic concession, or privilege granted by a government to targeted groups in order to promote a public objective, where the government bears some portion of the cost of commodities and services to make the same affordable for the targeted groups. Food and fertiliser subsidies are glaring examples.

Populism refers to a range of political stances that emphasize the idea of the people and often juxtapose this group against the elite. Populists’ schemes also contain subsidies from the government to provide anything at a cheaper rate. Schemes like offering free food or cooked food at very low prices is an examples of Populists’ schemes. It is not poor but rich and corporates are also given huge subsidies in form of the lower tax rate, lower interest rates, tax exemptions and incentives.

What is called a freebie could well be defined as a positive step towards inclusive economic growth. Former chief election commissioner OP Rawat attempts to coin a definition. According to him, except for subsidies given to promote food production, direct benefits for employability, educational attainments, sports, cultural activities, free medical care to the poor, free food to those who are destitute to sustain themselves and affirmative action for weaker sections, including women, everything else is a freebie and should be so recognised.” He adds that free power, free cell phones, free laptops etc, fall in the ambit of freebies.

History shows that what is dubbed a freebie today transforms into an entitlement, a national programme a few years later. The mid-day meal scheme started by K Kamaraj and extended by MG Ramachandran in 1982 was first ridiculed by the Centre only to be adopted as a national programme a decade later. N T Rama Rao’s promise of rice at Rs 2 per kg is the original incarnation of the current-day National Food Security Programme.

Telangana’s Rythu Bandhu and Odisha’s KALIA were forerunners of the PM Kisan Samman Nidhi. The National Food Security Act of the UPA regime has been reincarnated as Pradhan Mantri Garib Kalyan Anna Yojana (PM-GKAY).

When any non-BJP ruled state government gives freebies, the Centre is worried not because of any fiscal profligacy, but because it does not want any non-BJP state government to gain any popularity in this way. So, it is adopting hostile federalism, squeezing the fiscal capacity of states.

What is interesting is that “freebies” are part of the BJP culture too. If it were the case that the BJP is a non- “freebie” party, then someone will have to explain all the posters and hoardings of the prime minister next to a gas cylinder and a beaming recipient of the LPG subsidy.

Perhaps the Prime Minister forgot that the “revdi” culture that he is openly opposed to was very much part of the BJP culture, considering that a few months ago, Uttar Pradesh Chief Minister Yogi Adityanath announced a 50 per cent reduction in power tariff on agricultural use to directly benefit over 13 lakh users in rural and semi-rural areas.

The Prime Minister is not opposed to the “revdi” culture for he embraces it wherever the BJP is in power, be it in Uttarakhand, Manipur or for that matter, Gujarat. The BJP also embraced this culture during the 2020 Delhi Assembly elections.

The Congress, which toyed with the idea of a universal income guarantee as an election promise, came down heavily on the BJP for triggering the debate on freebies. As noted by Kapil Sibal, in the run-up to the February 2022 Assembly elections, the BJP promised two crore tablets or smartphones under the Swami Vivekananda Yuva Sashaktikaran Yojana. Also, the President of the BJP announced that free ‘scooties’ will be given to meritorious college girls to empower the women of the state.

The party also promised financial assistance up to Rs 1 lakh for the wedding of girls belonging to poor families. Two free LPG cylinders were assured under the Pradhan Mantri Ujjwala Yojana every Holi and Diwali. Financial aid was also promised to be hiked from Rs 15,000 to Rs 20,000 under the Mukhya Mantri Kanya Sumangala Yojana. The BJP also declared a free commute in public transport for women passengers above 60 years of age and free electricity for farmers.

Similarly, in October 2021, the Madhya Pradesh government approved a subsidy of over Rs 15,700 crore in power bills for farmers and continued a subsidy of Rs 4,980 crore for domestic electricity consumers for the year 2021–22.

Similar benefits of 125 units of free electricity to consumers costing the state exchequer about Rs 250 crore as also a waiver of water bills in rural areas were announced by the Himachal Pradesh government in April 2022. It also announced a 50 per cent discount on travel fares of state buses and financial assistance of Rs 1,500 per month to all women aged between 18 and 60 years.

Ahead of the Manipur Assembly elections, the BJP promised Rs 25,000 to girls from economically weaker sections under the ‘Rani Gaidinliu Nupi Maheiroi Singi Scheme’ and to increase the monthly pension for senior citizens from Rs 200 to Rs 1,000, if voted back to power.

The BJP party, which was opposed to the National food security Act has introduced Pradhan Mantri Garib Kalyan Anna Yojana (PM-GKAY) just in a different version. This is a scheme as part of Atmanirbhar Bharat to supply free food grains to migrants and the poor. The way government defines freebies, providing foodgrains to 80 crore poor under the Food Security Act can be considered as a revdi culture too? The government provides work under MNREGA to people in distress. Was this freebie, too?

Pradhan Mantri Annadata Aay Sanrakshan Abhiyan (PM-AASHA) is an umbrella scheme aimed at ensuring remunerative prices to the farmers for their produce. Pradhan Mantri Annadata Aay Sanrakshan Abhiyan (PM-AASHA), which is aimed towards ensuring remunerative prices to farmers for their produce, the government has taken an unprecedented step.

The recent scheme is expected to complement the increase in MSP which will be translated to farmers’ income by way of a robust procurement mechanism in coordination with the states. PM AASHA scheme or Pradhan Mantri Annadata Aay Sanrakshan Abhiyan is a scheme introduced to ensure that farmers receive the right price for their crops.

Andhra Pradesh chief minister Jagan Mohan Reddy’s YSR Congress Party in its application said it was unfair to term all welfare measures freebies. It said the state’s programmes such as Amma Vodi and Rythu Bharosa were called freebies in total disregard of their purpose and impact.

However, not every freebie evolves into an ideal. A useful example of freebies turning disastrous is the free power regime pioneered by the Akali Dal in the nineties. The free power regime is a live threat to India’s energy and economic security. No revenue is collected for a fifth of the power distribution, and State Discoms are losing over Rs 75000 crore a year — 28 of them are loss-making and owe generating entities over Rs 1.09 lakh crore.

In September 2019, the corporate tax reduction can be considered the biggest ever freebie given to corporates in Indian history. Similarly, loan write-offs amounting to more than 12 lakh crores in the last 7 years can be considered as part freebies given to loan defaulters, especially the rich and corporates.

Freebies or subsidies or populist schemes enhance the purchasing power of people. However, the first priory should be given to provide health, and educational facilities free of cost. But this is missing by a big margin today. This is a matter of serious concern which needs to be addressed by the Supreme court first.

 

 

The author is an Odisha-based eminent columnist/economist and social thinker. He can be reached through e-mail at [email protected]

 

DISCLAIMER: The views expressed in the article are solely those of the author and do not in any way represent the views of Sambad English.