freebies-bleed-economy-yield-no-dividends

In Punjab, the ruling Aam Aadmi Party was widely believed and expected to win the maximum number of seats in the parliament because of the 300 units of free electricity it provides to consumers every month. It only won 3 of the 13 parliamentary seats in the state, despite the fact that thousands of households across the state, cutting across socio-economic status, are getting ‘zero electricity bills’.

 

In the two-month billing cycle, it comes to 600 units of free electricity. With power costing about Rs 7 per unit in Punjab, up to 300 units a month comes to about Rs 2100 in subsidy every month to every household, irrespective of its social or economic status.

 

Even if someone is a multimillionaire, if his or her monthly consumption is less than 300 units, there will be no electricity bill. The subsidy amount has been increasing from Rs 15,700 crores in the first financial year of the government (2022–23) to over Rs 20,477 crores in the current fiscal.

 

This is the additional burden the state has to bear since the AAP government launched the free electricity scheme in July 2022, within four months of coming to power in Punjab. A large number of households across the state have been getting “zero electricity bills."

 

Some households have bifurcated the power connections, using various legal loopholes, thus increasing the number of people getting the power subsidy. Sometimes, as many as 90 percent of households were reported to have “zero electricity bills." The maximum number of households usually get a “zero electricity bill” during the winters when there is low consumption of electricity.

 

Punjab is not an exception where the freebies, which Prime Minister Narendra Modi calls 'rewris', have not worked in the general elections. Even in Delhi, where the AAP government is providing free electricity and water to the maximum number of people, it has not been able to open any accounts during the last three general elections since 2014. 

 

However, it has managed to win the Delhi assembly elections regularly since then, and that too with a sweeping majority. Akali stalwart Parkash Singh Badal made power free for the agriculture sector in Punjab after he took over as the Chief Minister in 1997. He was voted out in the 2002 assembly elections.

 

Before him, Ms. Rajinder Kaur Bhattal had announced free power for farmers owning up to 7 acres of land. The Congress lost badly within a few months of announcing the subsidy. Congress, in its 2024 election manifesto, had, among other things, promised Rs 8500 monthly cash assistance to every family living ‘below poverty line’ (BPL family) and a Rs 8500 monthly stipend for every fresh graduate and diploma holder.

 

The Congress still could not reach the double-figure mark and was stuck at 99 seats. Rahul Gandhi’s statement that money will be deposited every month “khata-khat, khata-khat...’ (immediately) in people’s bank accounts did not seem to make much of an appeal anywhere.

 

He had even announced the date of July 1, 2024, for the “khata-khat” deposits to start, while expecting to form the government on June 4. That did not happen, though, and he was saved from doing what was practically and economically impossible to do, and the country’s economy was saved from being bled and crippled. 

 

He, along with other Congress leaders like Mallikarjun Kharge and Priyanka Gandhi, even used to quote examples of HP, Karnataka, and Telangana, claiming that their party had fulfilled all the guarantees it had made to people in those states. 

 

In the states of Karnataka and Telangana, where the Congress stormed to power with the promise of certain "guarantees,"  the party did not fare well in the general elections. In Karnataka, the Congress, according to its own estimates, was expected to win about 15-20 of the 28 seats in the state. It could win just nine seats despite having fulfilled guarantees like free bus travel for women and Rs 2000 in monthly cash assistance for women from socio-economically weaker backgrounds. 

 

Despite bearing a huge financial burden of Rs 36,435 crores in 2023–24 and Rs 52,009 crores in the current fiscal, the party’s performance in the general elections was far from its expectations. It is rightly believed that if the Congress had performed along expected lines in Karnataka and Telangana, the BJP-led NDA may have found it difficult to cross the halfway mark.

 

In Telangana state, too, the Congress’ performance was below par, far below its expectations. Having won a landslide victory in the assembly elections last year, the Congress could win only 8 of the 17 parliamentary seats in the state, while the BJP also won 8 and AIMIM won one. The guarantees included Rs 2500 every month for every woman from a poor family, 200 units of free electricity, a gas cylinder for Rs 500, and free bus travel for women.

 

While free bus travel and 200 units of free power have been started, the government is yet to start paying Rs 2500 every month to women under the Gruhalakshmi scheme. It has promised to fulfil this guarantee after the general  elections. It may now delay the implementation of this scheme for the time being.

 

The Congress government has also promised and implemented some similar populist schemes in Himachal Pradesh, like the ‘Old Pension Scheme’ and free bus travel for women. Also, the Congress drew a blank, losing all four parliamentary constituencies to the BJP. However, it won four of the six assembly by-elections in the state. This proves that people are generally not convinced by the unrealistic promises or guarantees made at the time of elections.

 

Besides, for the Congress at the national level, there was a tough, almost invincible rival in Narendra Modi that the populist guarantees didn’t work. The political parties will be doing a great service to the nation if they start avoiding the 'rewri’ culture of freebies.

 

Either it does not deliver any desired results, or the dividends are just short-term while the adverse economic and financial impact on the country or states is long-term. And the worst problem with the freebies is that once they are started, no political party can dare to reverse them, lest it end up writing its own epitaph and obituary.