TOPIC 30

THE POLITICS OF FREEBIES – POPULIST PROMISES AND FISCAL RESPONSIBILITY

Are Election-Time Guarantees Genuine Welfare or Unsustainable Vote Buying?

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In April 2026, Tamil Nadu Chief Minister M.K. Stalin announced a new scheme: free bus travel for all women in government transport corporations. Already, Tamil Nadu offers free electricity to farmers, free laptops for students, and free breakfast in government schools. Before the 2024 general elections, Congress promised “Mahalakshmi” – ₹1 lakh per year to every poor family. Before the 2025 Delhi elections, AAP promised ₹15,000 per month to every woman and free electricity up to 200 units. Before the 2026 West Bengal elections, TMC promised ₹1,000 per month to all women. The BJP – which once criticized freebies as “revadi culture” (freebies) and “political bribery” – has itself promised free rations, free housing, and loan waivers in various states. The Supreme Court has called the proliferation of freebies “a serious economic issue” and “a burden for future generations.” The Reserve Bank of India has warned that the fiscal cost of freebies is “unsustainable.” Yet voters demand them. And politicians supply them. This article examines the economics of election-time freebies, the legal and political debates, the distinction between “freebies” and “welfare,” and the consequences for fiscal federalism.

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WHAT – “Freebies” refer to electoral promises of free utilities (electricity, water), transport, cash transfers, loan waivers, gold for weddings, free televisions/laptops, and other goods or services provided or promised by political parties to voters, typically at government expense.

WHO – All major political parties (BJP, Congress, AAP, TMC, DMK, SP, BSP, RJD, etc.) make freebie promises. State governments (which bear the primary fiscal burden) implement them. The Supreme Court (which has both condemned freebies and declined to ban them) arbitrates. Economists and the Reserve Bank of India (which warn of unsustainability) provide critique.

WHEN – Freebie promises have intensified since the late 2000s, particularly after the Delhi “zero electricity bill” promise by AAP (2013), and have become a nationwide phenomenon across all states in the 2024-2026 election cycles.

WHERE – Across India, with particular intensity in Tamil Nadu, Delhi, Punjab, West Bengal, Telangana, Andhra Pradesh, and Karnataka.

WHY – Officially, political parties defend freebies as “welfare” and “social justice” – redistributing resources to the poor, reducing inequality, and fulfilling constitutional Directive Principles. Critics argue freebies are short-term vote-buying strategies that crowd out investment in infrastructure, health, and education, leading to fiscal crises.

HOW – Through budget allocations (often unbudgeted), through subsidies to public utilities, through loan waivers (which shift liability to banks), and through direct benefit transfers (cash into bank accounts).

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SECTION 1: WHAT ARE FREEBIES? – WELFARE VS. VOTE-BUYING

The distinction between “welfare” and “freebies” is contested. Not every government scheme that provides benefits to citizens is a “freebie.”

1.1 Common Categories

1.2 The Distinction – When Does Welfare Become a Freebie?

The Supreme Court has called freebies a “serious economic issue” and a “burden for future generations.” But the Court has also acknowledged that not all electoral promises are freebies – some are legitimate welfare.

Economists use the test of “fiscal space” – does the state have the revenue to sustain the scheme without compromising essential services or borrowing unsustainably?

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SECTION 2: THE DATA – HOW MUCH DO FREEBIES COST?

2.1 Fiscal Cost of Selected Schemes (Annual, estimated)

Sources: State budget documents, Reserve Bank of India reports, PRS Legislative Research

2.2 State Subsidy Burden as % of GSDP (2025-26 Estimates)

Source: Reserve Bank of India – State Finances: A Study of Budgets (2025-26)

2.3 The Fiscal Unsustainability Warning

Chief Economic Adviser V. Anantha Nageswaran has repeatedly warned that the proliferation of freebies is pushing state finances to the brink.

“Freebies that are not backed by productivity enhancements are fiscally unsustainable. States are spending more on subsidies than on capital investment. This is a recipe for fiscal crisis.”

The RBI’s 2025 report on state finances noted that state subsidies grew at 15% annually between 2018-2025 – twice the rate of revenue growth.

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SECTION 3: THE POLITICAL ORIGINS – FREE SAMOSA VS. FREE ELECTRICITY

3.1 PM Modi‘s “Revadi Culture” Critique (July 2022)

Prime Minister Modi’s critique of freebies brought the term “revadi” (a cheap sweet) into political discourse. He argued that freebies “destroy the tendency to work” and “weaken the economy.” He specifically criticized the AAP’s promise of free electricity and the Congress’s promise of cash transfers.

Key Quote:

“The ‘revadi culture’ is very dangerous for the development of the nation. – Those who have this revadi mindset will not build new expressways, new airports, or new defense corridors. They will only distribute free revadi.”

3.2 The Opposition‘s Response – “Free Samosa vs. Job Loss”

Opposition leaders responded by contrasting the cost of freebies with the economic hardship caused by demonetization, GST implementation, and COVID-19 lockdowns.

3.3 The BJP‘s Own Freebie Record

Despite criticizing freebies, the BJP has implemented or promised:

The BJP’s critique is thus of freebies promised by opposition parties – not freebies themselves.

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SECTION 4: THE LEGAL DEBATE – CAN FREEBIES BE BANNED?

4.1 The Supreme Court’s Ashwini Upadhyay Petition (2022-2026)

BJP lawyer Ashwini Upadhyay filed a PIL seeking to ban political parties from promising “irrational freebies” – defined as “any distribution of any free commodity, cash, or service which is not authorized by the Constitution and is prone to violate the Doctrine of Level Playing Field.”

Key Arguments:

The Government‘s Response:

The central government – despite its critique of freebies – opposed the PIL, arguing that:

4.2 The Supreme Court’s Pending Hearing

The Supreme Court has heard the petition multiple times but has not issued a final judgment. In its last hearing (March 2026), the Court observed:

“We are concerned about the fiscal impact of freebies. But we cannot ban political parties from making promises that are within the constitutional framework. The remedy lies with voters, not with the court.”

The Court has asked the Election Commission to consider framing guidelines for freebies in election manifestos – but has not mandated them.

4.3 The Election Commission‘s “Guidelines on Manifestos” (2014)

The ECI has existing guidelines requiring parties to:

The ECI has not disqualified any party or candidate for violating these guidelines.

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SECTION 5: THE ECONOMIC DEBATE – FREEBIES AS INVESTMENT OR CONSUMPTION?

5.1 The Case Against Freebies

5.2 The Case For Freebies (As Welfare)

5.3 The Middle Path – Conditional vs. Unconditional Freebies

Economists across the political spectrum largely agree that targeted, conditional ‘freebies‘ (e.g., cash conditional on school attendance) are preferable to universal, unconditional ones.

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SECTION 6: THE POLITICAL ECONOMY – WHY FREEBIES WIN ELECTIONS

6.1 The Data – Electoral Impact

Studies of state elections (2014-2024) show that freebie promises significantly influence voter choice:

6.2 The Incumbent‘s Advantage

Incumbent governments – across parties – discover that implementing freebies before elections is an effective vote-winner. Examples:

The Pattern: Freebies help incumbents retain power, but challengers can also use freebie promises to defeat incumbents – as the Congress did in Karnataka (2023).

6.3 The Escalation Cycle

Once one party promises a freebie, other parties feel compelled to match or exceed it. This creates an escalation cycle – each election sees higher promises than the last.

The escalation cycle has no natural endpoint. Each victory rewards higher promises, until fiscal limits are reached.

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SECTION 7: THE SUPREME COURT‘S DILEMMA – TO INTERVENE OR NOT

7.1 The S. Subramaniam Balaji Judgment (2013)

The Supreme Court held that promises of freebies in election manifestos are not “corrupt practices” under the RP Act unless they constitute “bribery.” The Court distinguished:

The Consequence: Most freebie promises (free electricity, free bus, loan waiver) are future government policies – not direct cash payments to voters. They fall outside the definition of “corrupt practice.”

7.2 The Pending Petition (Ashwini Upadhyay)

The pending PIL seeks to overturn or narrow the Balaji precedent. The Supreme Court has not yet ruled.

7.3 The ECI‘s Role

The ECI has issued guidelines but cannot prosecute freebie promises unless they meet the narrow definition of bribery.

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SECTION 8: COMPARATIVE ANALYSIS – FREEBIES IN OTHER DEMOCRACIES

India‘s freebie culture is among the most intense in the world, comparable only to Brazil and South Africa.

The Key Difference: In Brazil, freebies (Bolsa Família) are conditional on school attendance and health checkups – incentivizing productive behavior. In India, most freebies are unconditional, leading to fiscal stress without behavioral benefits.

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SECTION 9: THE WAY FORWARD – REFORM PROPOSALS

9.1 Fiscal Responsibility Legislation for States

9.2 Transparency in Manifestos

9.3 Reform, Not Ban

Economists broadly agree that banning freebies is impractical and undemocratic. Instead, the goal should be to reform freebies away from universal, unconditional transfers toward targeted, conditional welfare.

9.4 Incentivize Capital Investment

The RBI could provide fiscal incentives to states that reduce subsidy-to-GSDP ratios and increase capital investment-to-GSDP ratios.

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SECTION 10: THE CENTRAL QUESTION – DEVELOPMENT OR VOTE-BUYING?

The politics of freebies reflects a deeper tension in democratic theory: what is the legitimate role of the state in redistributing resources?

What Is Undeniable:

What Remains Disputed:

The Unanswered Question:

If every election produces higher freebie promises – and if every freebie promise is fiscally unsustainable – how long before India‘s states face a debt crisis?

The RBI has warned. The Chief Economic Adviser has warned. The Supreme Court has observed. But election after election, the freebie cycle continues.

Because the party that promises the most, wins. And the party that wins, does not pay the cost – it passes the bill to future generations.

Democracy may be the government of the people, by the people, for the people. But if that government is bought with promises it cannot fulfill – is it democracy, or is it auction?

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SUMMARY TABLE: THE FREEBIES DEBATE – INDIA VS. OTHER DEMOCRACIES

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