Rational freebies

Only legislatures can decide the parameters of welfare spending

On Tuesday, a Bench of the Supreme Court that included the Chief Justice of India asked the Union government to evolve a view on “freebies” in election campaigns. This was as it heard a case from a petitioner who sought that the Election Commission of India (ECI) prevent state and national political parties from promising such “freebies”— especially given the fiscal implications of such promises. The court expressed concern that such promises might influence voting behaviour and thus lead to unfairness at the polls. The court’s concern is understandable, and reflects a broader sentiment in that such politicking is wasteful and “irrational”. Yet the judiciary must be careful that it does not trespass here into grounds that are the domain of the legislature.

What is a “freebie”, and what is a legitimate welfare scheme? Determining that distinction must be left to the legislature and, in a broader sense, to the people of India. Elite opinions on the difference should be disregarded. After all, free gas connections have had both great electoral salience in parts of India, but are also seen as having vital welfare components. Can the courts or the ECI decide on such basic elements of development-focused government policy? They have neither the competence nor the bandwidth to do so.

Asking constitutional bodies such as the ECI or the Finance Commission does not help solve the problem. After all, the ECI only has powers to control government actions once the model code of conduct is in force. Freebies can easily be promised or implemented before or after that period. Nor does the ECI have the expertise to deal with fiscal outcomes of promises. The Finance Commission can define such expenditure and make recommendations in this context, but ultimately it will be for the legislature to decide. Defining some state-level schemes as freebies and Union level schemes as welfare-oriented, for instance, could increase tensions between the two. Thus, the right of the state and Union legislatures to determine how public money should be spent cannot be curtailed by a technocratic body such as the Finance Commission without undemocratic pressures building up, which would cause a loss of legitimacy for the Indian state. It is up to technocrats to make recommendations — but, ultimately, the decision should be left to the people’s representatives in Assemblies or Parliament.

One way to address the sentiment and instincts behind the petition and the court’s response is to ensure that voters and decision-makers are better informed about the longer-term consequences of election-focused promises. The idea of a fiscal council that would provide medium-term analysis and guidance around expenditure plans has been around for some time and must once again be taken up. Such a body can make technical assessments about debt, deficit, and entitlement dynamics and place them in the right fiscal context. This would inform public debate and voter decisions, and act as a disincentive for promises that are clearly unimplementable or too expensive. With the right information, competitive populism can at least be forced to act in the realm of fiscal reality. But, either way, democratic legitimacy and the rights of the legislature come first.