Freebies vs Welfare - The Dilemma of India’s Economic Democracy

Context:

• The debate over welfare measures and freebies has resurfaced with political parties making populist promises in elections.
• While welfare schemes are meant to uplift the poor, excessive dependence on freebies raises concerns about economic sustainability, self-reliance, and governance priorities.

Freebies and Political Promises:

• In the recent Delhi elections, political parties have competed to offer “freebies” rather than focus on development strategies.
• Earlier, a prominent political party’s 2024 manifesto highlights welfare schemes such as:
  • PM Garib Kalyan Anna Yojana – free rations to 80 crore people since 2020.
  • Direct Benefit Transfer (DBT) – ₹34 lakh crore credited to citizens.
  • PM Mudra Yojana – 46 crore loans worth ₹27 lakh crore.
  • PM SVANidhi Scheme – easy credit to 63 lakh street vendors.
• The question arises: Are these welfare measures or mere electoral inducements?

The Economic Burden of Freebies:

• Several states, including Maharashtra (admit funding issues for the Ladki Bahin scheme) and Gujarat, struggle with funding social schemes and essential public services like education and healthcare.
• The government claims 25 crore citizens have moved out of poverty, and 17 crore jobs were created in 10 years, yet freebies continue.
• Critics argue that such measures can hinder economic productivity and foster dependency.

Constituent Assembly Debates on Socialism and Welfare:

• On November 15, 1948, a motion to declare India a socialist state was debated but rejected.
• K T Shah supported socialism, advocating for:
  • Equal justice and opportunity.
  • Economic security for all citizens.
• B R Ambedkar opposed the motion, stating:
  • The Constitution should not dictate economic policies but leave them to governments elected by the people.
  • Prescribing socialism in the Constitution would undermine democracy.

Economic Democracy and Social Order:

• Damodar Swarup Seth (discussing Article 38, ‘State to secure a social order for the promotion of the welfare of the people’ in 1948) criticized the capitalist structure, arguing that a socialist democratic order was essential for true welfare.
• Mahboob Ali Baig Sahib Bahadur emphasized that political parties have distinct ideologies, and voters expect implementation of their agendas.
• Ambedkar’s perspective on economic democracy:
  • The Constitution sets an economic ideal but does not prescribe a specific system.
  • Economic democracy can take multiple forms, including individualism and state intervention.
• J B Kripalani’s vision of democracy (1949): Democracy must be both political and economic. The class divide in India limits economic democracy, despite political equality.

India as a Welfare State - Reality Check:

• A welfare state protects and promotes the economic and social wellbeing of its citizens based on the principles of
  • Equal opportunities,
  • The equitable distribution of wealth and
  • Public responsibility for those citizens who cannot afford the bare necessities of a decent life.
• India faces challenges such as:
  • Poverty
  • Unemployment
  • Widening wealth gap
  • Failing healthcare
• The Supreme Court in S.Subramaniam Balaji v. State of Tamil Nadu justified freebies, sparking debate over fiscal responsibility.

Conclusion - Need for Introspection:

• E M Forster once said: “Two cheers for democracy. One because it admits variety and two because it permits criticism.”
• In his 1845 novel Sybil (or the Two Nations - the rich and the poor), Benjamin Disraeli writes: “Power has only one duty — to secure the social welfare of the people.”
• India must evaluate whether excessive freebies align with sustainable economic growth and true welfare.

Q1. Critically analyze the impact of freebies on India's economic growth and self-reliance.

Ans. Excessive freebies may create financial burdens on states, discourage employment generation, and shift focus from sustainable development to short-term electoral gains.

Q2. Discuss the views of B R Ambedkar on socialism and economic democracy as debated in the Constituent Assembly.

Ans. Ambedkar opposed including socialism in the Constitution, arguing that economic policies should be determined by elected governments.

Q3. Examine the role of the Supreme Court judgment in S. Subramaniam Balaji v. State of Tamil Nadu in justifying freebies.

Ans. The SC upheld state governments' power to provide welfare schemes but highlighted the need for financial prudence and a balance between welfare and fiscal sustainability.

Q4. Evaluate the challenges India faces in becoming a true welfare state.

Ans. Despite welfare initiatives, India struggles with poverty, unemployment, inequality, and inadequate public services.

Q5. Explain J B Kripalani’s perspective on democracy and its economic implications.

Ans. He emphasized that democracy must be both political and economic, warning against the rigid class divisions that prevent true economic equality in India. 

Source :IE