Facts and Fables of Freebies

The fresh debate over freebies that began with Prime Minister Modi ji statement at revdi culture, allegedly pursued by the likes of Delhi CM Arvind Kejriwal has involved people from all walks of life that include Polity, judiciary, and academics. Dr. P.C. Singh analyses the course of events in this article.

Using the opportune moment of inaugurating Bundelkhand expressway as a step forward in modernization, he had remarked that freebies is against development as it is irrational. He made it clear that if we want to construct road and highways, we will have to keep a distance from the tendency of wooing voters through means of distributing revdi.

Kejriwal’s response was prompt as he countered the view by asking whether opening government schools for poor, providing electricity to people on subsidized rate and mohalla clinic are freebies? If yes, what about loan wave –offs to the rich and influential often in the name of encouraging investment and infrastructural development? Kejriwal got immediate support from the Congress and DMK. Loan wave-off is probably more uneconomical as it has helped increased the size of NPA in India. The ‘muffler man’ went to the extent of challenging Mr. Modi by asking him to have a national debate on the issue.

Prime Minister’s objection to freebies practice is not altogether illogical as it creates a sort of burden on the national economy. However, it loses its spirit once it is realized that there is no party in the country which does not indulge in this so called ‘maligned practices’. That is why it is in operation in almost all states. It is called welfare by one and given the metaphor of ‘revdi’ if the same practice is followed by the rival.

However, the concept of freebies is not at all well-defined and clear - neither in economic literature nor in the government document. It must not be identified with the category called subsidies. The election Commission is too not fully empowered to take a call on it. The matter is subjudice before the apex court and the verdict is awaited on the plea of the PIL pleading that since by luring the voters, it dilutes the political preference of the people, it is anti-constitutional. The political parties involved in such practices ought to be punished thereof.

Economists and experts look at it from wider perspectives. Nobel laureate Abhijt Banerjee finds it ridiculous to believe in the argument that such practices make the poor lazy. On the contrary, Banerjee and his wife have found in their study that little aid-relief have proved boosting and motivational for the neglected down-trodden. Raghuram Rajan is adamant at calling loan wave-off as subsidies. The Belgian born Indian development economist and activist Jean Dreze, who has made India his karmbhoomi is absolutely opposed to calling social security measures like MGNREGA as freebies. Similar view is offered by former JNU professor, Arun Kumar who argues that a country like India is not in a position to deny freebies to the poor at the cost of loan-wave off to crony capitalist. A more pragmatic economist C. Rangarajan finds it rational in making a divide between good and bad freebies. S.Y. Quraishi, has recently remarked that given the kind of poverty and inequality that continue to exit in India it would be meaningful to honour the value associated with welfare measures. A former civil servant has been the chief election commissioner of India.

The professional economists are well aware of the old – debate which was called then as Market-versus-the state, and similar debate on the issue of food security bill involving Amartya Sen on the one hand and his rival Jagdish Bhagwati. However, throwing light on the old debate, Sen had argued that even the leading proponent of market economics like Adam Smith had also called it ethical to invite the state if the market fails. The world had witnessed the active state in the wake of market failure during great depression. The way out had been suggested by the British economist John Maynard Keynes. The policymakers in India may be asked to look at the fresh freebies debate as old wine in a somewhat different bottle.

Dr. P.C. Singh (Author)

Dr. P.C. Singh A doctorate from JNU and a Masters from Delhi School of Economics, he has more than 25 years of experience of research and teaching. He has been involved in doing research in academics, and Mass Media including television & print. He has worked in various mainstream media houses like SAHARA INDIA, INDIA NEWS, NEWS LINE, PATRIOT etc. He has to his credit a book and numerous articles published in Indian Express, Telegraph, Hindustan Times, Pioneer, India Abroad, Think India Quarterly. He is at present, professor at JIMMC, Noida.