Avoid gifts, avoid bankruptcy | Deccan Herald

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Hearing a PIL seeking guidance against “gratis” on August 3, the Supreme Court asked for suggestions on the composition of a committee that can approach the issue “dispassionately” and make recommendations. This gave the impression that it was up to Parliament, in addition to the Electoral Commission, to take the initiative to enact a law on the limitation of gratuities.

The Union Government Financial Suitability Standards clearly state that “no authority shall exercise its powers of expenditure sanction to place any order which shall be directly or indirectly for its benefit; and the expenditure of public money should not be incurred for the benefit of any particular person or section of the population, unless a claim for the amount can be enforced in court or the expenditure is in pursuance of ‘a recognized policy or custom’.

The irresponsible spending of taxpayers’ money on “gifts” is neither a recognized policy/custom nor sanctioned by a court. This is a gross financial impropriety that amounts to bribing voters with public money, just to gain an electoral advantage. An individual candidate who distributes money or alcohol (with his own money) to collect votes is treated as a corrupt practice, and rightly so, but a party which corrupts voters, which also uses the public money, obtains legitimacy (albeit de facto).

Some experts have sought to justify gifts by saying that “a promise made by one party is a contract with the people”. This is a fallacious argument because the redemption of such a promise is inextricably linked to the use of taxpayers’ money. Without the latter, the former would be meaningless. On the other hand, making a promise not backed by (albeit public) resources is downright misleading.

Unlike “normal” budgetary expenditures, which are planned and supported by efforts to generate revenue, the additional financial obligations imposed by the “freebies” promised in the electoral manifesto affect the state’s budgetary position in an uncontrolled way. For example, the AAP’s promise of free electricity and an allowance of Rs 1,000 per month to every adult woman in Punjab will reduce the state budget by Rs 20,000 crore per year. This will come at the expense of development spending or lead to additional borrowing, pushing debt to unsustainable levels.

Ideally, any welfare measure should target the poor and that too for a limited period, after which it should fend for itself. But the “gifts” given today challenge this cardinal principle.

Unlike a normal welfare scheme, which has an expiration date and ends once the underlying purpose is met, the “freebies” offered by political parties do not. Indeed, these allocations are not supported by any well-defined objective; here, the only goal is to influence voters. Gifts being the basis of victory, the parties concerned are inclined to promise them election after election.

The “free” culture changes the mindset of people, making them complacent towards work. This may lead to a scenario where India’s demographic dividend would be converted into a demographic liability. In short, “freebies” are a recipe for state financial bankruptcy and economic disaster. The only way to avoid it is to prohibit the parties from making such promises.

The Supreme Court in July 2013 in a case S Subramaniam Balaji v Government of Tamil Nadu & Ors had said that distribution of ‘freebies’ of any kind influences people.

“This to a large extent undermines the root of free and fair elections.” However, he had considered that the promises contained in the election manifesto could not be interpreted as a “corrupt practice” in the sense
the Representation of
Persons Act.

He had asked the EC “to draw up guidelines which could ‘govern’ the content of the electoral manifesto of all recognized political parties in consultation with them as when it had acted in drawing up guidelines for
general conduct of the
candidates, meetings, processions, election day, ruling party, etc.

He added that “this can also be included in the model code of conduct – under a separate heading for the guidelines of the election manifesto published by a political party – to guide political parties and candidates”.

The EC has never proposed such a directive.

Meanwhile, the “freebies” not only continued, but proliferated, contributing significantly to the increase in debt-to-GDP ratios of most states to at least 33% – going as high as 50% in Punjab.

The EC is now asking parties to provide “details” on what they intend to promise voters, the financial impact and how it will be funded, bearing in mind the budgetary position of states. The Modi government has also hinted at amending the RPA to limit “free” ones. Will these movements lead to positive results?

(The writer is a

Delhi-based policy analyst)

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