The great Indian freebie debate

There indeed are schemes that are populist. But not all are mere handouts as TN model of welfare economics shows good initiatives would pay forward soon enough.
The great Indian freebie debate
Illustration: Saai

CHENNAI: US President Joe Biden’s big-ticket student loan waiver might not have improved his approval ratings to the expected degree there, but it certainly has added spice to the debate over ‘freebies’ in India.

It has taken the sting off the criticism by opponents of freebies who invoke the US to discredit such schemes in India, while its the votaries of welfare schemes, who consider ‘freebies’ as a disparaging term, are citing it to justify the universality of the idea.

As the heated discussion over freebies versus welfare schemes debate continues, a recap of history shows that such initiatives date back to colonial Madras.

A century ago, the government of Justice Party, the ideological and political forerunner to the modern day Dravidian parties, had incentivised education by launching free breakfast for Corporation school students in the then Madras to bring the non-Brahmins to the school way back in 1922.

Over the last century, the scheme metamorphosed into free midday meal scheme introduced by chief minister K Kamaraj of Congress after coming to power in 1954, nutritious noon meal programme during MG Ramachandran’s tenure in 1982, egg in noon meal introduced by M Karunanidhi 1996-2001, and chickpeas in noon meal launched by J Jayalalithaa. The latest is the breakfast scheme for school students that is set to be launched by Chief Minister MK Stalin.

Notably, it was only one of the incentives that the government initiated to improve enrolment. Karunanidhi introduced free bus passes and textbooks for government school students and Jayalalithaa provided them free laptops, school bags, bicycles and footwear to students, most of whom hail from the lowest socioeconomic strata of the society.

There are other initiatives as well, like abolition of Common Entrance Test for professional courses admission and fee waiver for first generation graduates by the Karunanidhi-led regime.

The benefits of similar supportive measures reflected in the State’s Gross Enrolment Ratio (GER): Tamil Nadu’s GER of 51.4 per cent is nearly double the national average of 27 per cent.

Such assistance and incentivisation is not restricted to the realm of education alone. Long ago, when cataract surgeries and spectacles were considered out of reach for the poor, the Karunanidhi government introduced the free cataract surgery and spectacles scheme for the poor. From maternity assistance programme, girl child protection and development programme and free medical kit to the recent comprehensive health insurance scheme, all helped the poor access quality healthcare. Those supporting government interventions point out that such schemes have taken Tamil Nadu to the top of the table of Human Development Index.

Free rice scheme is one such flagship programme that won the appreciation of even leading economists like Nobel laureate Amartya Sen and Jean Dreze. Originally launched by CN Annadurai-led DMK regime in 1967 as rupaiku moonu padi latchiyam, oru padi nitchayam (the magical election slogan that took the party to power after unseating Congress in 1967), it was revived in 2006 by Karunanidhi who launched rice at Re 1 per kg through PDS. Jayalalithaa enhanced it by making it free of cost.

Despite facing opposition from the Centre that is insisting on targeted PDS, Tamil Nadu continues to implement universal PDS by procuring rice from the Union government at varying rates for different classes.

Its impact is evident when one looks at the statistics. While income transfer through PDS accounted for 11 per cent of total poverty reduction in rural India, it stands at an enviable 44 per cent in rural TN, the highest in India. According to the consumption survey of National Sample Survey Office (NSSO) 68th round, PDS rice accounts for 56 per cent (5kg) of the total monthly average per capita rice consumption of 9kg in rural TN. In contrast, the national average is 29 per cent.

But it is not without criticism, some of them seemingly valid. The Dravidian parties have also been criticised for squeezing the State’s resources on schemes that are questionable. The free colour television scheme launched by the DMK regime in 2006 was one such. About 1.64 crore TV sets (Rs 2,265 each) were distributed at an estimated cost of Rs 3,687. 10 crore, before the Jayalalithaa-led AIADMK government scrapped the scheme after coming to power in 2011.

Another was the 50 per cent subsidy for women to buy scooters that was offered by the AIADMK in its 2016 poll manifesto. Launched by Prime Minister Narendra Modi, whose comments that opposition parties were offering ‘sweets’ to lure voters played the most part in triggering the latest round of debate, it soon faded into oblivion for want of funds. Critics questioned the relevance of the scheme in a State that has robust public transport infrastructure, especially in its urban areas.

The quality and even relevance of the free mixer, grinder and fan scheme launched in the 2011-16 Jayalalithaa regime is another scheme that did not escape scrutiny.

In April 2022, pointing out that only 24 per cent applicants were genuine, the State government reworked the ‘gold for thaali’ scheme to transform it into an education assistance programme for women. Under the redesigned scheme, the government would deposit Rs 1,000 per month in the name of girl children pursuing higher education and hand over the total amount upon completion of the course.

Even as they agree that not every poll-time announcement would qualify as actual welfare measure, many who support such initiatives, most of whom benefitted from them over the decades, say terming measures that improved the State’s standing in important human development indices like enrolment ratio, poverty alleviation, better health infra that was lauded by the WHO itself, etc. as freebies is disparaging and elitist.

‘How did TN achieve this growth if freebies drained the State?’

State Planning Commission vice chairman Professor E Jeyaranjan, an ardent defender of welfare measures, opines that terming it freebies is a misnomer that misses the point altogether. Edited excerpts:

“Who decides which scheme is essential and which is not? We don’t have data to decide who deserves the benefits of a particular scheme of the government. So, how will you decide who gets what?

“It is wrong to call them freebies. I would call it reform. People get benefits from the taxes they pay. It is not the big corporations that contribute to the tax basket, even ordinary people contribute to the GST. Let us study last month’s GST collection. Tamil Nadu contributed Rs 8,200 crore to the GST pool, while UP and Maharashtra contributed Rs 7,000 crore and Rs 22,000 crore, respectively. If you calculate the tax collection in relation to the State population, Tamil Nadu has contributed an average Rs 1,500 per person to the GST pool, but UP and Maharashtra contributed only Rs 312 and Rs 1,022 each, respectively.

“GST collection being an indirect indicator of economic activity, this amply demonstrates that such schemes did not turn the people here lazy. They gave oil, cereals and salt ahead of UP polls. If they think it’s a wasteful expenditure, why did they implement it? Eradication of poverty is the main goal of sustainable development world over. Tamil Nadu has performed remarkably well on that front over the last five decades. So, how will you blame such a performing State?

“People who claim that the schemes drain the exchequer and contribute to mounting debts should explain how the debts of the Union government have increased exponentially over the years.

“They accuse Tamil Nadu of spending lavishly on freebies. How will you substantiate the charge that freebies have drained the State and rendered it ineffective? How did Tamil Nadu achieve this growth if freebies drained the State in the last 50 years? How did the State, which was on a par or worse than Bihar 50 years ago, progress above or equal to historically industrial states like Maharashtra and Gujarat on various parameters of HDI over the last five decades?”

As told to K Karthikeyan

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