Freebies and a financial crisis

Telangana Chief Minister A. Revanth Reddy

Soon after Congress president Mallikarjun Kharge urged party State units to only make promises that were financially viable, Prime Minister Narendra Modi attacked the Congress saying it made “unreal promises” during election campaigns but realised only later that implementing them was tough or impossible.

It was evident that Telangana, the only State where the Congress won Assembly elections in the last one year, was the target of Mr. Modi’s remarks. One reason for the Congress’s victory in the 2023 Assembly elections was the Bharat Rashtra Samithi (BRS)’s arrogance. Another major reason was the party’s grand promises to the people.

Telangana Chief Minister A. Revanth Reddy reacted sharply to Mr. Modi’s comments saying the Congress kept its promises unlike other parties. He said he also wished to clarify the many misconceptions and factual errors that he believed Mr. Modi wanted to propagate. Within two days of taking charge on December 7, 2023, the Telangana government announced free bus travel for women across all State Road Transport Corporation buses and healthcare and hospitalisation cover of ₹10 lakh under the Rajiv Aarogyasri scheme, Mr. Reddy said. In 11 months, women had taken 101 crore free bus trips, which had helped them save ₹3,433.36 crore, he said. Thus, it had implemented two of its promises soon after coming to power.

Next, his government had also implemented India’s largest State-level farmer loan waiver of ₹2 lakh for 22,22,365 farmers and had deposited ₹18,000 crore into farmers’ accounts, he said. Mr. Reddy also said women were happy that the government was providing free electricity up to 200 units in their homes and gas cylinders at ₹500. Under his tenure, there have been 1.31 crore refills that have benefited 42,90,246 women, he stated. The Chief Minister added that none of these schemes have been extended to any State ruled by the Bharatiya Janata Party (BJP).

Ironically, Mr. Modi made these remarks soon after the BJP promised financial assistance of ₹2,100 per month for all women, free LPG cylinders on Diwali and Rakshabandhan, and cylinders at ₹500 throughout the year in Jharkhand. In Maharashtra too, the Mahayuti government comprising the BJP, the Eknath Shinde-led Shiv Sena, and the Ajit Pawar-led Nationalist Congress Party has been busy implementing the Ladki Bahin Yojana which promises women aged 21-65 years a monthly financial benefit of ₹1,500. The government is banking on this scheme, among other reasons, to return to power. In Madhya Pradesh, apart from Mr. Modi’s rallies, schemes such as Ladli Behna Yojana were credited for the BJP’s victory. “Mr. Modi said he would bring back black money stashed in foreign accounts and he promised to generate two crore jobs every year. None of this happened. These are the real ‘fake promises’, not our welfare schemes,” argued Mallu Ravi, a Dalit Congress MP from Telangana.

The BRS, which had ruled Telangana for 10 years, had also made many promises. It assured 24-hour free electricity and financial support of ₹10,000 per acre per year to farmers and implemented these schemes. However, its much-touted Dalit Bandhu scheme, under which all Dalit families were promised one-time assistance of ₹10 lakh cash and two bedroom houses, led to the party’s downfall. Worse, in the process of trying to keep these promises, the BRS dragged the State into debt of nearly ₹7 lakh crore.

While the BJP is blaming the Congress for unfulfilled promises, it is a fact that all parties endorse the freebie culture, then struggle to fulfil their promises, or fulfil them leaving the State in a financial crisis. The problem is that parties often confuse freebies with welfarism: while freebies are meant solely to attract votes and do not strengthen the public good, welfare initiatives, such as the public distribution system, are meant for the long-term benefit of society. Freebies may be smart politics and certainly help parties get immediate gains, but exemplify bad economics, and Telangana showcases this. The Telangana government will need to spend around ₹40,000 crore every year if it wishes to implement all the promises it has made. In such a scenario, not just Congress State units but the State units of all parties should pay heed to Mr. Kharge’s words. And more importantly, they need to reflect on which of their promises truly benefit communities in the long run.