A Tale of Two Guarantees
The upcoming general election is a contest between the poll guarantees of the Bharatiya Janata Party and the Congress. EPISODE #169
Dear Reader,
A very happy Monday and Happy Holi to you.
Little over a week ago the Election Commission of India announced the dates for the general election to elect the 18th Lok Sabha. The world’s largest democracy with a staggering 986 million voters, will go to polls in seven phases that begin on 19 April and end on 1 June.
Around the same time, Congress, the principal opposition party, announced a set of guarantees—Paanch Nyay—to woo voters. True to their style, they were a list of populist giveaways targeting key cohorts like youth, women, poor and so on.
Curiously, this comes weeks after the Bharatiya Janata Party (BJP), perfected a campaign slogan around their star campaigner, Prime Minister Narendra Modi: Modi ki Guarantee. Drawing attention to their record in office especially in delivering welfare at scale, the BJP promises unprecedented prosperity in the next five years.
How do these contrasting guarantees of the two national parties stack up?
I will try and unpack the challenge, drawing on inputs from an interview with Haseeb Drabu for a forthcoming show on StratNews Global. Haseeb is a gifted economist, former finance minister of Jammu and Kashmir and someone who speaks his mind.
The cover picture is sourced from the Election Commission of India.
Happy reading.
Poll Promises
Little over a week ago the Election Commission of India (ECI) announced the dates for the general election to elect the 18th Lok Sabha, formally setting in motion the electoral juggernaut of nearly a billion voters!
Political parties, always ahead of the ECI curve, are already off the blocks. It is not just the national parties—who hog all the headlines—but regional outfits and Independents too hit the poll circuit much earlier.
This is also the season for poll promises. Indian politicians have a history and ability of selling snake oil, wherein they manipulate the vulnerabilities of voters to make their case.
Indeed while this is the case, we have seen how Indian voters have collectively delivered stunning verdicts, surprising pundits of all hue. For instance, after three decades of voting in coalition governments, they abruptly opted for a majority regime from 2014—like turning a switch off and on.
The wonders of India democracy never cease to amaze me.
Indeed while India’s voters have a method in their choice, it has not prevented politicians from luring them with freebies and promises. Going by anecdotal trends I believe that there is a structural shift underway.
Mere inducements are not working. They were never the sole reason, but definitely influenced voter choices. Instead, it seems poll promises now have to align with aspirations—which are growing exponentially, as India materially trades up. (Check out this week’s StratNews Global offering shared below, which captures the fallout in terms of consumption behaviour as disposable incomes grow).
It is in this backdrop that I wished to flag the promises of India’s two national parties—Congress and Bharatiya Janata Party (BJP). In short it is the battle of two ideologies: entitlement vs empowerment. While the Congress believes in handing out fish, the BJP is investing in people to teach them how to fish.
The contrast in their promises, holds a mirror to the new trend I am talking about. While the BJP under Prime Minister Narendra Modi is seeking to distance itself from conventional freebies, the Congress (for all practical purposes) led by Rahul Gandhi is pulling out all stops and laying out a populist agenda laced with freebies for key cohorts like women and youth.
BJP’s electoral dare is particularly impressive, given that their regime, National Democratic Alliance (NDA), is facing a two-term anti-incumbency. It is a risky gambit that they are not joining this game of competitive populism. But, one with huge upside benefits. Indeed, if the BJP-led NDA wins this election, as most pollsters claim, then they may have forced a structural break in the manner in which elections are fought in India.
The Lure of Freebies
I am sharing above a summation of the guarantees of the Congress party, sourced from Twitter. They are self explanatory and the common theme is giveaways—some of which entail potentially huge fiscal costs.
We have an example in Karnataka, where the Congress won the recent elections to the state assembly. Their manifesto promised a range of freebies, the cost of which comes upwards of Rs50,000 crore. Given that national elections are round the corner, the state government has had to deliver on its promise, which in turn has squeezed or denied expenditure under different heads.
This is exactly the point Haseeb makes in the upcoming interview on StratNews Global. I had asked him to comment on the fiscal cost of such populist promises, based on his experience as a former finance minister:
“What it does is to reduce my flexibility as a finance minister, in terms of allocating for where there is need to create capacities to build infrastructure, so it eats away into that because it's now become the fixed cost.”
Muft ki Revadi
In contrast the BJP has been tight fisted with their giveaways. But, if the situation required, they have not hestitated—especially at the level of state elections. Nationally, the biggest example was the farmer stipend they promised (and paid out) in the run-up to the 2019 general election.
However, over the last couple of years, they have begun to up their ante against populism in a calibrated manner. Sharing the clip of PM Modi making his famous “muft ki revadi (freebies)” remark.
Instead, they have fashioned a slogan around their ability deliver targeted welfare—banking, cooking gas, electricity, drinking water and delivering 2 billion plus vaccines to combat covid-19—at staggering scale: Modi ki Guarantee.
The BJP is using this record to promise “unprecedented prosperity” over the next five years. In the same context, the party disclosed that they have readied an agenda for the first 100 days and the next 25 years in office.
Growing Scrutiny
Significantly, all this comes about when the Supreme Court last week admitted a public interest litigation (PIL) which questions the practice of political parties offering electoral freebies to lure votes.
Arguing that such promises violate the Constitution of India and soaks up tax payer contributions, the PIL seeks a ban on populist measures designed to gain undue electoral advantage.
We will have to await counting of votes on 4 June to know the choice of the nearly billion voters. But, till then we can take solace from the fact that at the least a debate on electoral freebies has been initiated in the world’s largest democracy.
Recommended Viewing/Reading
Sharing the latest post of Capital Calculus on StratNews Global.
A few weeks ago, the National Sample Survey Office (NSSO) released the first tranche of its latest survey on consumption expenditures. The release of the latest Monthly Per Capita Expenditure (MPCE) comes after a gap of a decade—normally it is supposed to be released every five years.
Regardless, the new set of data provides us a very revealing and compelling snapshot of India’s rapidly transforming consumption behaviour. To unpack the underlying trends, I spoke to Rajesh Shukla, CEO of People Research on India’s Consumer Economy (PRICE), and a previous guest on the show.
Rajesh, who has spent most of his working life studying India’s consumer economy shared some brilliant insights.
Sharing the link below. Do watch and share your thoughts.
Till we meet again next week, stay safe.
Thank You!
Finally, a big shoutout to Premasundaran and Aashish for your informed responses, kind appreciation and amplification of last week’s column. Once again, grateful for the conversation initiated by all you readers. Gratitude also to all those who responded on Twitter and Linkedin.
Unfortunately, Twitter has disabled amplification of Substack links—perils of social media monopolies operating in a walled garden framework. I would be grateful therefore if you could spread the word. Nothing to beat the word of mouth.
Reader participation and amplification is key to growing this newsletter community. And, many thanks to readers who hit the like button😊.
Dear Anil
The Tale of Two Guarantees is very interesting because so much is at stake for many individuals as well as the whole country. Now one just has to wait and see what finally succeeds- is it the short term benefits or the long term permanent gains. One used to hear that people used to cast their vote for the simple allure of a free meal, free alcohol plus that day's wages! That has perhaps been replaced by freebies like free water, electricity, free travel for ladies etc. In the earlier days, it used to be the gratification of a single day. Now will it be the satisfaction of a few weeks or months? Can't people see that such freebies will be sustained at the cost of the tax payers money. No politicians nor political party is going to dip into it's savings to uphold election promises. Plus,the funds which should ideally be allocated to the development of the country is being wasted on temporary benefits.
The whole country and perhaps the whole world will be waiting on June 4 with baited breath to know the verdict of the greatest democracy in the world. What will succeed? Short term gains or long-term benefits? It is said that we get the government we deserve. Let's keep our fingers crossed.
Dear Nimesh,
Thank you for your thoughts.
Afraid, I don't have the data to answer your query on every promise. Yes, there is data that can be sourced from institutions like RBI to verify some claims--like banking 500 million people. Good point though. Maybe CAG should be entrusted with this task.
Agree with you. There are no free lunches. Everything comes with a cost. In the case of UK, inordinate waiting time. In Delhi we are seeing infrastructure like roads, street lighting etc take a hit to fund the freebies.
Why just blame politicians. After all they are elected by us voters.
Look forward to your continued participation.
Best
Anil
Best
Anil