2024 Elections: High stakes of freebies vs fiscal responsibility

| Updated: 29 May, 2024 12:48 pm IST

NEW DELHI:As the 2024 Lok Sabha elections is ongoing , the manifestos of India’s leading political parties lay bare the intricate web of electoral promises designed to captivate voters’ imaginations and, crucially, secure their votes. Among the most discussed elements of these manifestos are the array of “freebies” that parties propose, ranging from cash transfers and free education to subsidized utilities and healthcare services. These promises, while aimed at immediate voter gratification, raise significant concerns about their long-term economic implications.

Indian National Congress (INC):The INC’s manifesto, titled “Nyay Patra,” introduces the ambitious Mahalakshmi Scheme, pledging Rs. 1 lakh annually to impoverished families. Additionally, the party promises free education in public schools and free napkin vending machines in public spaces. While these measures address vital social needs, they also exemplify the strategic use of freebies to attract voter support. The estimated cost of the Mahalakshmi Scheme alone, around Rs. 6 lakh crore, raises questions about the feasibility and sustainability of such large-scale cash transfers without adversely affecting the nation’s fiscal health.

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Bharatiya Janata Party (BJP): In contrast, the BJP’s “Sankalp Patra” emphasizes continuity over drastic new measures, subtly embedding freebies within the framework of ongoing schemes like Ayushman Bharat and the PM Garib Kalyan Anna Yojana. Promises such as free electricity for poor households and extended free ration distribution highlight the party’s strategy to retain voter trust through consistent, albeit less flashy, welfare programs. This approach aims to bolster the narrative of steady governance and economic prudence, while still appealing to key voter demographics.

Dravida Munnetra Kazhagam (DMK): The DMK’s manifesto includes targeted freebies, such as Rs. 1,000 monthly for all women and free SIM cards for college students. These promises reflect a tailored approach to address specific societal segments, enhancing financial support for women and expanding digital access for students. However, the financial burden of these promises, when extended across the entire population, could significantly strain state budgets.

Trinamool Congress (TMC): The TMC’s sweeping promises, including free housing for all poor families, doorstep ration delivery, and ten free gas cylinders annually for BPL families, appear as a direct response to intense political competition. These initiatives, while attractive, pose serious questions about feasibility and the potential for misuse, especially given the logistical and financial challenges inherent in such large-scale distribution.

The reliance on freebies raises critical concerns about the economic stability of the nation. As highlighted by economists, schemes like the Congress’ Mahalakshmi Scheme and the DMK’s monthly stipend for women could lead to significant fiscal costs, necessitating substantial revenue-enhancing measures. The history of loan waivers and direct cash transfers demonstrates that such populist measures, while temporarily alleviating economic distress, often result in long-term financial burdens. The report by DBS Bank underscores the need for fiscal prudence, warning that the Congress’ extensive social welfare promises could jeopardize macroeconomic stability.

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The 2024 election manifestos reveal a stark dichotomy in approaches: the BJP’s emphasis on continuity and incremental expansion of existing schemes contrasts sharply with the Congress’ bold, high-cost welfare promises. While both parties aim to bolster India’s global economic stature, their methods diverge significantly. The BJP’s focus on infrastructure, manufacturing, and macroeconomic stability aims to propel India into the top three global economies by 2027. In contrast, the Congress promises to double the GDP in the next decade through aggressive social welfare programs, risking fiscal stability for immediate voter appeal.

As voters head to the polls, they are tasked with weighing these manifestos against their own economic realities and aspirations. The immediate allure of freebies must be balanced against the potential long-term consequences on the nation’s fiscal health and economic stability. The challenge lies in discerning whether the promises made are sustainable and if they align with a broader vision of inclusive and sustained economic growth.

The manifestos for the 2024 Lok Sabha elections highlight the complex interplay between populist promises and fiscal responsibility. While freebies may offer short-term solutions and immediate voter appeal, the true test lies in their implementation and the broader impact on India’s economic trajectory. As the nation stands on the cusp of a pivotal election, the choices made will shape the future of India’s economy and its place in the global arena.

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