General Election of 2019 is about to start and all parties have already made promises of freebies, loan waiver and many more as part of their political propaganda. Recently, Congress president Rahul Gandhi promised Rs. 6,000 a month dole plan (the scheme called Nyunatam Aay Yojana – Nyay) for India’s poorest families, if the Congress party is voted to power.
Congress party will give 72,000 rupees to each of India’s poorest families every year if voted back to power. Any family earning less than 12,000 rupees a month would be eligible and would receive 6,000 rupees every month. It would benefit India’s poorest 20% families i.e. 2250 million of a population of 1.3 billion.
Simple arithmetic tells you the scheme will cost Rs 360,000 crore – an amount that is far greater than what the central government spends on all manner of subsidies, from food to electricity, fertilizers, water, scholarships, rations, etc. That is about 13 percent of what next year’s overall budget is estimated to be. It is more than half the estimated fiscal deficit.
The government recently implemented the scheme for farmers that promises Rs. 6,000 a year to small and marginal farmers. It aims at 12.5 crore beneficiaries.
If all other schemes stay and Rahul’s NYAY (Nyunatam Aay Yojana) comes over and above them, the fiscal deficit would rise to Rs 10.6 lakh crore in 2019-20. That’s about 5.1 percent of the estimated GDP for the next fiscal.
History for lucrative freebies to attract voters to win the election.
This is not the first fee stuff distribution by any politician, there has been much charity announced during election times by the politicians to lure or fool voters. Following are some of the biggest freebies announced by politicians to attract voters.
Free Laptop Distribution in Uttar Pradesh (Akhilesh Yadav)
A total of 15 Lakh laptops have been distributed by the Government of Uttar Pradesh between 2012-2015, making it one of the largest distribution scheme ever imitation by any Government in the world. The contract was awarded to the HP India for Rs. 2858.7 crore to supply 15 lakh laptops.
Free TV, Mobile and Mixer Grinder
In 2006, The Tamilnadu, Dravida Munnetra Kazhagam ( a major political party ) in their election manifesto, given the promise of issuing color TV set to each household. In 2011, AIADMK Ms. Jayalalitha announced that if she got elected, then she would give a table fan, mixer grinder for each household in Tamilnadu and Laptops For Students studying in government schools at the cost Of RS.3100 crore.
Student and Farmer Loan waiver
- The first nation-wide farm loan waiver was implemented in 1990 by Janata Party government led by then Prime Minister V.P. Singh and cost the government Rs 10,000 crores.
- In 2008, P. Chidambaram, at the time Finance Minister of India, announced a loan waiver of 716.8 billion rupees
- In 2014, Telangana waived Rs. 17,000 crore in loans to 3.6 million beneficiaries.
- In 2017, at least four states Uttar Pradesh, Maharashtra, Punjab, and Karnataka, announced farmer loan waivers, with an estimated cost of about US$13.6 billion. Experts project that if the loan waivers are implemented nationally, will cost about 2–2.6% of GDP (US$40–50 billion).
Is it really helping poor people?
Studies show that big and mid-size farmers are the ones who gain the most from farm loan waivers. I wonder if the poor farmers are even getting any loan from the bank. By giving freebies to people, the government is making them dependent. In my view, this is not going to solve all their issues and will never help them to grow.
While this will make the scheme more affordable, it makes it almost unimplementable and makes it very corruption-prone. Such a scheme, that sounds ideal from the point of view of a theoretical economist requires every household to correctly declare its income and take only what is due to it. That’s an invitation to large-scale corruption.
I know many people in my village who lived in big houses and own car but they declare enough evidence to get freebies offered by the government schemes. I don’t see any proper governance of government schemes and this is the reason, the money goes to the wrong hands and never reach to the poor people.
“The waivers hurt India’s public sector banks which are already under stress. Many farmers in other states have stopped paying loans and are withdrawing deposits from banks in anticipation of waivers. In some states, the default rate has increased to 50% – 60%.”
Wake Up Call
All political parties are trying to lure the voters by lucrative freebies to come into power. Once elected, no party look back to people and solve the real issues. People on the other side, are easy to influence and get their vote by giving them freebies or money.
We all know that political parties could go to any level and announce anything to get the vote and win the election, BUT it’s time to wake up and Say NO to these freebies and political parties offering such schemes. It is the time to ask for development, long term growth plan, act to make poor people independent and making them skilled, more good quality schools/colleges and proper governance of all existing government schemes to help the right people.
Politicians are getting a good result after announcing such freebies or loan waiver, therefore, they are not stopping and keep on adding more promises to win the election. In my view, these are bribe or vote for money deal and it’s done in the form of freebies. Please put your comments below for people awareness and educating people.
General Elections are very near, therefore, do not vote only for the freebies. Choose your leader carefully for the bright future.
Thank you for reading and God bless you all.