Electoral Math Meets Politics of Economics

Sops are effectively political flyovers deployed to overcome inadequacies in governance. The cult of taxpayer-paid promises has led to the exponential expansion of an electoral constituency dubbed as “beneficiaries” and has led to the neglect of policies necessary to correct asymmetry in socio-economic circumstances.

By Shankkar Aiyar | Published: 14th May 2023 |

The evolution of electoral sops has reached a new milestone. It is no longer enough to promise benefits, they have to be backed by signed guarantee cards.

The Indian National Congress promised Rs 2000 per month to woman heads of families, Rs 3000 monthly allowance for unemployed graduates, 200 units of free electricity, and 10 kg of rice to low income families.

The promises have been underwritten on a guarantee card, co-signed by Congress leaders Siddaramaiah and D K Shivakumar. Apparently nearly 2 crore persons — that is, roughly one of three residents in Karnataka — possesses an IOU from Congress.

The BJP on its part promised five kg of millets, five kg of rice, half a litre of Nandini milk, three cooking gas cylinders to every BPL household and a matching grant of up to Rs 10,000 in savings deposits. The Janata Dal (S) promised Rs 10,000 per acre capped at 10 acres for farmers to procure inputs, Rs 2000 for farm labourers, Rs 2 lakh to women who marry agriculturists and five cooking gas cylinders.

That the sops race should star in election manifestos in Karnataka is a testimony to the expansion of helicopter politics. Karnataka is the hyper-hub of India’s tech prowess — indeed it was showcased to visiting leaders from G20 nations.It has ove r 5500 ITES companies, nearly 700 MNCs, accounts for a fourth of the state output and contributes over $50 billion in export earnings.

The Economic Survey for 2022–23 underlines that its GSDP (gross state domestic product) grew by 14.2 per cent to Rs 22.41 lakh crore and boasts that its per capita income at “Rs.3,01,673 is higher by 77% to All India Per Capita Income of Rs.1,70,620 during 2022–23”.

Karnataka is scarcely the only state where electoral sops have occupied headline attention. In Gujarat, another industrialised state, the Aam Aadmi Party promised 300 units of free electricity, unemployment allowance of Rs 3000 and Rs 1000 for women besides stipends for lawyers. The Congress promised loan waiver of Rs 3 lakh, LPG cylinder at Rs 500.

The race for Rajasthan, Madhya Pradesh and Chhatisgarh is as yet some months away but the sops race has begun and is manifest in budgets and statements. The Ashok Gehlot regime in Rajasthan unveiled an election budget with sops ranging from free power to subsidised LPG cylinders, ramped up health cover et al. In Madhya Pradesh Chief Minister Shivraj Chauhan has announced Rs 1000 per month to women who do not pay income tax and the Congress in response have announced an allowance of Rs 1500 per woman per month.

The price being paid is visible in denial of services, poorly funded health and education, in unfilled vacancies — it is estimated that there are over a million government posts vacant across state governments.

It is also manifest in project funding delays and costs paid by the taxpayer. Non-development expenditure of state governments has shot up from Rs 10.63 lakh crore in 2020–21 to over Rs 14.18 lakh crore. Ostensibly, real development is harder and election sops deliver better returns in the hustings

Wooing voters is not limited to giveaways. Political parties are reversing reforms which threaten to distort the fiscal balance of states. The pension burden of states is estimated at Rs 4 trillion and is growing. In Himachal Pradesh, Rajasthan, Jharkhand, Chhatisgarh, Punjab, in state after state parties are reverting from the fiscally prudent market related new pension scheme introduced in 2003–04 to the old pension scheme which increases the burden on states. The pitfalls of such moves have been illustrated in many studies.

Indeed the Reserve Bank of India in its report “State Finances — A Risk Analysis” observes that the “sustainability of public debt at national and sub-national levels” is yet again a dominant fiscal risk.

It cautions “Given this parlous situation, the tendency towards handing out cash subsidies, in normal times, provision of free utility services, and revival of the old pension scheme by some states and extension of implicit and explicit guarantees by various state governments in India act like swords of Damocles.”

The issue has been examined by the Supreme Court following a PIL. In October 2022 the Election Commission of India proposed changes in proposed changes to its manifesto guidelines and sought the response of parties requiring disclosures on implementation and impact of poll promises. Political rhetoric though has bypassed sage advice.

Electoral sops are effectively the preferred political flyover deployed by parties — and no party can claim innocence — to overcome inadequacies in governance and target particular groups of voters to seize power. This, in the fifth largest, fastest growing economy which runs the world’s largest food security programme covering 800 million people and one of the largest health insurance schemes covering 500 million people.

The bitter reality is that in recent years the cult of taxpayer-paid promises has led to the exponential expansion of an electoral constituency dubbed as “beneficiaries”.

The challenge under the big tent is to devise policies to accommodate the aspirations of the working age populace at the bottom of the income pyramid. The noise around every election campaign is about the legendary potency of caste arithmetic. In the coming days and weeks pollsters and parties will torture election data to derive convenient convictions. The inconvenient truth is that the magic of socially engineered electoral math has come face to face with the politics of economics.

Shankkar Aiyar, political economy analyst, is author of ‘Accidental India’, ‘Aadhaar: A Biometric History of India’s 12-Digit Revolution’ and ‘The Gated Republic –India’s Public Policy Failures and Private Solutions’.

You can email him at shankkar.aiyar@gmail.com and follow him on Twitter @ShankkarAiyar. His previous columns can be found here.