Freebie debate: The best way forward

The limits of freebies, as discussed by experts at a recent webinar.

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A webinar, consisting of a panel discussion, titled 'Freebies Culture and its Impact on Indian Politics & Democracy' was organised on September 3 by the Association for Democratic Reforms ('ADR'), a non-partisan, non-governmental organization that aims to improve governance and strengthen democracy in the area of electoral and political reforms. In view of a recent public interest litigation ('PIL') challenging freebies offered before election by political parties being heard by the Supreme Court, the webinar, as moderated by Anil Verma, Head of ADR, focussed on bringing together stakeholders representing different views and perspectives on the issue.

Promises to be kept in check

"Fundamental rights and directive principles of state policy should first be secured before making other promises", said Ashwini Upadhyay, a member of the Bharatiya Janata Party, a Supreme Court advocate, and the petitioner in the PIL that challenged the practice of promising freebies by political parties during elections. Upadhyay pointed out that states are already under tremendous amounts of debt, where their economic and financial condition does not allow them to promise and give freebies.

Upadhyay claimed that making promises when the states lack money to even guarantee fundamental rights and implement directive principles like clean water, quality education, health, and judicial and police reforms, is against constitutional principles. He expressed the need for the Election Commission to prepare a Model Manifesto to be followed by all political parties. He opined that a committee should be formed comprising constitutional bodies, such as the Law Commission of India, to put down a proposal on how to deal with the issue.

Upadhyay referred to the Delhi High Court judgment of Najma versus Govt. of NCT of Delhi (2021) to highlight that the Chief Minister of Delhi, Arvind Kejriwal, was held responsible, under the principle of estoppel, for making a promise during a press conference that the government would pay the rent for any tenant who was unable to pay due to poverty.

Freebie used as a pejorative term

Dr. Ajit Ranade, Vice Chancellor, Gokhale Institute of Politics & Economics, Pune gave factual examples and statistics, and questioned whether the PIL before the Supreme Court has taken into account the economic background as has been projected to the court. According to Dr. Ranade, an element of freebies is inherent in certain expenditures of the government such as free vaccines, schools, hospitals, and public transportation, where the consumer is not charged the full cost. Ensuring basic rights of citizens and voters, and decreasing inequality in society cannot be termed as a 'freebie', Dr. Ranade added.

Will the free goods and subsidies provided under the National Food Security Act, 2013, the Mahatma Gandhi National Rural Employment Guarantee Act, 2005, or the Pradhan Mantri Garib Kalyan Anna Yojana fall under the purview of freebies, Dr. Ranade questioned. According to him, such welfare spending, supplemented by a rights-based approach (such as the right to food, and the right to work) have fiscal implications. He further opined that the government spending on account of such subsidies has a much bigger impact on the Gross Domestic Product than what is spent by political parties during the election campaigns.

"In some ways, the use of the term freebie is pejorative, implying it is undeserved. The word itself carries a negative connotation", Dr. Ranade said. He added, "If free electricity is given to farmers, it is called 'freebie' but if it is given to industry or in a highly subsidised form, including as a tax holiday for ten years, then it is called an 'incentive'".

On Upadyay's recommendation of preparing a model manifesto to ensure that the political parties fulfill their promises, Dr. Ranade was of the view that a manifesto by a political party lacks the same sanctity as a budget that gets the approval of the Parliament. He suggested that the Election Commission could bring in certain measures under the Model Code of Conduct to introduce a responsible way of making promises to the public. "Ultimately it is up to the voters to decide whether an election campaign is credible and whether the promises and the freebies are in their interest", Dr. Ranade emphasised.

Confine freebies to election campaigns

S. Krishnamurthy, a former Chief Election Commissioner of India, was of the opinion that the welfare measures extended by the party-in-power should be distinguished from the electoral promises. According to him, freebies offered by the political parties violate the principle of a level-playing field of the contestants standing for the elections. This gives the political parties undue advantage by making promises to provide private goods for only a section of voters, for instance, cycles for girl students or laptops for college students, or grinders for housewives, hr added.

The practice of every political party making promises without financial support, particularly during state elections, is a 'disease' that has overtaken the election scenario, he asserted.

Krishnamurthy emphasised that the promise to lure voters is either through public goods or through certain merit goods. Explaining public goods, he explained when a political party, in its manifesto, proposes to build a stadium or bridge or a school, it should not be objected to as long as the government has the necessary funds to implement it.

On Dr. Ranade's suggestion of introducing measures under the Model Code of Conduct, Krishnamurthy said that the Election Commission can only censure, and it does not have the authority to impose a ban on promises by the political parties. Statutory provisions as a backup or warnings on the use of funds are needed, he added.

Not the court's business

"The idea to regulate the promises given by political parties in the context of election manifesto, in the interest of larger economy or public debt, goes against principles of freedom of speech and expression guaranteed by the constitution", said Alok Prasanna Kumar, co-founder and Lead of the Karnataka office of the legal policy think-tank Vidhi, providing a legal perspective on the issue of freebies.

On Upadhyay's suggestion of constituting a commission, comprising of constitutional bodies, Kumar said that such bodies, including the Law Commission of India and Finance Commission, are constituted temporarily, for specific purposes, and their primary functions are bound to suffer if they are directed to make other vital decisions, such as those relating to freebies.

Challenging Krishnamurthy's suggestion that private or merit goods offered by political parties should not be acceptable since they fall under the purview of 'freebies', Kumar remarked that private goods such as cycles for girls and household appliances like mixers have shown to empower women by positively impacting the society in the areas of education and health, as seen in Bihar.

Delving into the debate before the Supreme Court on welfare schemes and freebies, Kumar noted, "In terms of how the money is raised by the government or how the money is spent by the government, it is not the court's business to go into. This is not a debate that can be done under the aegis of the law. Unfortunately, our courts have stepped into a lot of issues in which they have no confidence, and which they have in fact confounded matters much worse".

Kumar drew on Upadhyay's reference to the Delhi High Court's judgment on the applicability of the principle of estoppel of the Chief Minister's promise, and pointed out that the principle falls under the concept of private law. He emphasised that during the course of an election, such promises are made in an individualistic capacity and should be distinguished from the government's official or institutional capacity. A government policy, as made by an institution, cannot be interpreted as an individual's policy, Kumar clarified.

Lastly, addressing the revenue side of the discussion, Kumar said that in addition to discussing how governments should spend the money in the context of 'freebies', it is important to also address how the governments get their money. According to Kumar, "If we keep cutting out more and more things as 'freebies', all we are doing is making the quality of life worse and worse for people without looking at the obvious way on how to increase government revenues".

On this note, Kumar pointed out that the taxation structure, under the Constitution, is heavily weighted in favour of the Union Government, and it has far more powers to levy taxes than the state governments. However, over the last couple of decades, the Union Government has found newer ways to avoid its responsibility of sharing tax revenues with state governments, Kumar added. He gave an example and said that the Union Government has asserted that while it has to share tax revenues, it need not share cess revenue. Thus, when more and more tax revenue is collected by way of cess, valuable revenue for state governments is being cut, Kumar concluded.

Click here to watch the full webinar.