FREEBIES 

Context

Still confusion

• The discussion on the demerits of "freebies" distributed to the public as a result of election promises is not new in India.
• There is often confusion on what constitutes "freebies", with several services that the Government provides to meet its constitutional obligations towards citizens also being clubbed in this category.
• The basic argument is that these are a waste of resources and place a burden on already stressed fiscal resources.

Distribution of foodgrains 

• The distribution of free food grain during a pandemic devastated lives and livelihoods at a time when godowns of the Food Corporation of India (FCI) had over 100 million tonnes of rice and Wheat.
• The Prime Minister and members of the BJP have repeatedly campaigned against the Government implementing the "World's largest food security programme" by distributing free foodgrain, through the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) to around 80 crore ration cardholders.
• It is probably what kept many away from the brink of starvation during the pandemic.
• It can be argued that coverage under the PMGKAY must be expanded to include non-ration card holders as well, many are excluded from ration lists but need to be subsidised or free food grains.
• Even before the pandemic, there have been studies which showed the poverty-reducing effect of the PDS.
• Subsidised food grains distributed under the PDS not only contribute to ensuring basic food security but also, act as an implicit income transfer allowing the poor to afford commodities that they otherwise could not.
• The PDS also plays an important role in our country where public procurement at minimum support prices (MSPs) is one of the main instruments of support to farmers.
• The PSDS allows foodgrains to be available for cheap consumers while assuring remunerative prices to farmers.

PDS Coverage

• From the Mid-2000s, the PDS increasingly became a political issue with State governments expanding coverage and reducing prices.
• Lower prices in the PDS became electoral issues in the Southern States even earlier. 
• This ultimately led to the National Food Security Act being passed by Parliament unanimously in 2013.
• Despite its shortcomings, It cannot be denied that the PMGKAY and the support that it provided during the pandemic would have been impossible had it not been for the NFSA which expanded the coverage of the PDS to about two-thirds of the population.
• In its absence, a much smaller number of people would have had ration cards with high errors in the identification of the poor (as was seen in the previous targeted system of dividing the population into those above and below the poverty line.
• With the expansion in coverage, exclusion errors have automatically reduced, although not eliminated. 
• A universal PDS would take us even closer to this goal.

MGNREGA 

• It has been another scheme which has been a lifeline for many during the pandemic and earlier.
• At a time when there are few employment opportunities, working under MGNREGA can guarantee some assured wages;
• if implemented in the true spirit of the legislation this is also demand-based and responds to as much need as there is.

Mid-day Meals 

• Mid-day meals in schools have been proven to contribute to increased enrolment and retention in schools and to addressing classroom hunger.
• Several other schemes such as old age, single women and disabled pensions, community kitchens in urban areas, free uniforms and textbooks for children in government schools and free health-care services play a critical role in providing social security and access to basic entitlements in our country.
• There are several lacunae in these programmes which call for expansion in coverage, and allocation of greater resources, along with putting in place mechanisms for greater accountability and grievance redress.

In perspective

• Undermining the importance of these interventions of the Government by calling them "freebies" exposes the elitism in our society, where the poor are seen as being unproductive and dependent on charity.
• The problem is that these issues are not given enough attention in the political process.
  If anything, building public pressure toward making welfare delivery an electoral issue is the need of the hour.
• A discussion on whether eggs will be served in the mid-day meal programme, how many days of work will be provided under the employment guarantee scheme, schemes for access to free medicines or at what price subsidised grain will be given under the PDS are positive signals of electoral democracy responding to the needs of the majority of people.
• It is important to recognise that most welfare schemes contribute to improving human development outcomes, which also results in higher economic growth in future.
• Sometimes, this process throws up initiatives that seem "wasteful" while these must be discussed, one cannot deny them completely.
• Around ₹1 lakh crore of the revenue is forgone annually as a result of "major tax incentives for corporate taxpayers.
• Putting together all tax exemptions and concessions, including foreign trade and personal income taxes, the revenue is forgone each year is over ₹5 lakh crore.
• Corporate tax rates have been reduced and Budget documents show that in 2019-20, the effective tax rate (tax-to-profit ratio) declined as profits increased.
• One does not see much pressure for a justification for these concessions in mainstream discussions.

Conclusion