Beware of free bijli, paani-wallas

It seems there is no stopping the freebie contagion from spreading further. On Saturday, the Punjab Government announced 300 units of free electricity to every household. AAP Chief Minister Bhagwant Mann said he was fulfilling a promise in the recent election. The party won with an overwhelming majority. At a conservative estimate, free power will cost the State Exchequer Rs. 5000 crores every year. The other promise of giving every woman, 18-year-old or above, a monthly cash dole of Rs. 1,000 will cost Rs. 12,000 crores annually. The question of where the money will come from in a revenue-deficit state like Punjab does not seem to concern Mann or, for that matter, anyone else in the ruling party. The AAP is in a hurry to expand to other states. It helps that it can boast that it keeps its election promises. Luring voters with freebies is one of the oldest tricks to win elections. Having done it in the national capital, a B-category State, Kejriwal seems to have seized on the freebie route to lull voters into plumping for his party. Ordinary voters cannot be expected to question where the money for freebies would come from so long as they get free power, free water, free this, and free that. It does not matter that the money spent on freebies could be better spent to create better and bigger infrastructure, a better climate for industrialisation, and better educational facilities. Or for reducing the debt burden of states like Punjab which are neck-deep in debt. Politicians concern themselves with today, here, and now, tomorrow is another day and someone else’s headache. Unfortunately, the freebie virus has gripped every party. Consider this: Fear of voters buying into the freebie spiel has made the BJP Government in Himachal Pradesh grant 125 units of free power to all households. This will cost the exchequer Rs. 250 crores annually. Besides, rural households will not be charged for water, another sop which will cost the state Rs. 30 crores annually. The important thing to remember is that Himachal Pradesh is set to go to the polls later this year. The AAP reacted to the HP sops, accusing the BJP government of copying it. Well, if Kejriwal claims copyright on 'free bijli-paani,' he can well have this dubious distinction. Various state budgets are already deep in the red, Punjab being one of the worst-performing states. These are bound to be pushed into bigger deficits, should competition among parties for outdoing one another in promising freebies gain further momentum. As it would, given that the Punjab Government will soon feel obliged to give Rs. 1,000 dole to women ahead of the elections in Gujarat and HP so that Kejriwal can try and lure voters in these states. A newbie party with no programme, no philosophy, no agenda, barring to pursue power, AAP has muddied the political waters further.

Eight years ago it came to power in Delhi with the slogan for free bijli paani. It has marginally improved the existing schools and opened tens of basic health centres in residential clusters. Yet, the noise generated is such as if AAP has transformed the face of the national capital. Truth is that being the national capital, Delhi serves as a trading hub for the neighbouring states, earning a lot in taxes. It is also revenue surplus thanks to generous financial assistance from the Centre. But such is the profligacy of the AAP Government that the debt of the Delhi Jal Board has now ballooned to nearly Rs. 73,000 crores, with not a penny being paid either towards the principal amount of interest in the last eight years. If you provide 20,000 liters of water free to all households, it is unlikely that the Delhi Jal Board will ever become financially viable. Leave aside the finances of the Delhi Jal Board, and take the Punjab budget. The amount under a single head goes towards serving debt. The state spends but a mere five percent of its debt on capital expenditure, according to the CAG. The rest goes towards non-development purposes. It is notable that at a recent meeting of senior bureaucrats with the Prime Minister the issue of freebies damaging state finances was flagged. But it is also remarkable that the Prime Minister’s own party in Himachal Pradesh has now felt constrained to join the freebie spree in order to ward off the threat from more reckless players. Ultimately, it is for the voters to reject the freebie culture and demand a responsible government that will use their money with due prudence, giving priority to the really needy rather than across-theboard distribution of taxpayers’ money like Diwali ladoos. That way lies the ruination of state finances.