The present debate over ‘freebies’, sparked by the hearings within the Supreme Court, has taken a pedantic flip, with public finance specialists and economists elevating doubts over whether or not an correct definition could be arrived at.
Experts and serving authorities officers who spoke to Business Standard (the latter on situation of anonymity) say whereas asserting and implementing schemes earlier than elections or at some other time is the prerogative of the political govt, there may be a must additional enhance public funds in Centre and states by hunting down inefficiencies, bogus beneficiaries and slicing down programmes that don’t serve their said goal.
“It is impossible to define a freebie. You cannot rule out a scheme based on a definition. This whole issue is a matter of serious discussion, especially on how you handle fiscal responsibility,” mentioned Montek Singh Ahluwalia, former deputy chairman of the Planning Commission and a former finance secretary.
On Tuesday, Chief Justice of India NV Ramana raised in courtroom the very challenge of defining freebies. “Suppose tomorrow a particular State says they are giving out freebies or launching a scheme, do we say it is the prerogative of the State government and leave it as it is? There has to be a balance,” he mentioned.
Reetika Khera, affiliate professor at IIT-Delhi, instructed this paper that electoral guarantees equivalent to electrical energy, laptops, gold chains, and many others, must be mentioned individually as rights equivalent to well being and schooling and legislated entitlements equivalent to subsidised rations below the National Food Security Act, 2013.
“In this debate, the strain on the exchequer arising from sops to industry, bad loan waivers, etc., should also be discussed. Also, I don’t think that deciding what is a freebie is straightforward. Therefore, it’s unlikely that we can settle this question easily. What is required is educating the public on the possibility that electoral promises trivialize elections or could be against the essence of good democratic practices,” Khera mentioned.
Among serving officers within the authorities, there may be a basic consensus that whereas a extra strong, knowledgeable dialogue on freebies or populist schemes must happen, it must be reserved for political and public coverage area and never the authorized realm. ALSO READ: Legislation or courtroom tips? Who will put freebies in a field?
“You can’t define populist scheme, although the 15th Finance Commission tried.
What can be done is better targeting, by removing inefficiencies and weeding out of bogus or duplicate beneficiaries,” mentioned a prime authorities official. “The Centre and some states are doing this in their own capacity but there needs to be a coordinated effort,” the individual added.
“Providing something for free may or may not be justified, calling it a freebie does not help. Some free provisions, like school meals, are extremely valuable. Others may be wasteful. They should be judged on their own merits, like all subsidies,” mentioned economist Jean Dreze.
Dreze added that in India, the most important beneficiaries of wasteful subsidies have been privileged lessons and the company sector. “Some wasteful subsidies may benefit poor people as well, but they are quite small in comparison,” he mentioned.
When the fifteenth Finance Commission was shaped, one of many phrases of reference given to it was suggest performance-based incentives to states primarily based on “control or lack of it in incurring expenditure on populist measures”.
In its report for 2021-26, the fifteenth FC said: “Many states stressed that the categorisation of schemes into populist and non-populist cannot be done objectively, as development requirements differ from state to state. Further, they argued that elected sovereign governments are accountable to the people of the state and they, rather than the Finance Commission, should have the prerogative of deciding the welfare schemes.”
This although fifteenth FC Chairman NK Singh had mentioned that the physique will provide you with a definition of populist schemes. In the tip, the fifteenth FC didn’t outline freebies or populist schemes.