In a cynical display of clientelism that has eclipsed governance and genuine welfare in the election-bound States of Rajasthan, Madhya Pradesh, Chhattisgarh and Telangana, ruling governments are raining freebies on voters.

Leading the charts is the Bharat Rashtra Samiti (BRS) government in the southern State which gives 2BHK houses and financial support to brides from economically weaker section families through Shaadi Mubarak and Kalyan Lakshmi schemes. Schemes including Rythu Bandhu, Dalit Bandhu, and the 2BHK housing initiative received substantial allocations of ₹15,075 crore, ₹17,700 crore, and ₹7,890 crore, respectively in the FY24 Budget. Numbers show that the State’s revenue is insufficient to cover welfare schemes. This could lead to high off-budget borrowing. In Rajasthan, Chief Minister Ashok Gehlot has allocated ₹2,720 crore to distributing smartphones to 40 lakh women. In the run-up to the election, the Gehlot government increased the free health insurance cover from ₹10 lakh to ₹25 lakh, whereas an expenditure on improving health infrastructure would have actually been a better option. Here the insurance companies and hospitals will be the real beneficiaries. Subsidies on LPG and electricity, more so the latter, leads to misuse. The fiscal deficits of these States are set to balloon as freebies will disrupt any post-Covid glide path to normalcy. Revenue expenditure is expected to grow at double digit levels in an election year.

This problem runs across the political spectrum. The BJP government in Madhya Pradesh has unveiled a series of schemes aimed at women and youth voters. Ladli Behna is just one among the several schemes aimed at women, who are 2.6 crore of the total electorate, where the State government gives ₹1,000 to each female child born in MP. At the time of marriage, the girl is given ₹51,000. The government has announced free scooters to Class 12 girl toppers. Total State borrowings have increased to ₹80,000 crore for FY24, registering a 14 per cent jump. Of all the States, Chhattisgarh seems to have spent the lowest on new schemes ahead of the elections although it has rolled out a number of measures – from farm loan waivers to unemployment allowance. The Old Pension Scheme in Congress-run States is expected to take a toll on fiscal finances in the medium term, according to a Reserve Bank of India paper.

It is crucial to distinguish between welfare expenditure that generates human, physical and social capital, and one that creates no tangible long-term gain. The mid-day meals and Amma canteens in Tamil Nadu (launched by the late Jayalalithaa but largely ignored by the current DMK government) are examples of developing human capital, whereas the distribution of phones, laptops and largesse for weddings would fall in the second. While political parties should be asked by the Election Commission to explain how they will fund their more frivolous promises, this distinction between welfarism and freebies must be understood – given that health and education indices in the northern States going to polls are abysmal.

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