[Answered] Discuss the rationale behind and implications of the Election Commission’s proposal on freebies by political parties.

Recently, ECI said it plans to make it mandatory for parties to inform voters about the “financial ramifications” of poll promises against well-defined parameters by amending the model code of conduct. It will require political parties to declare the extent of coverage of promises in terms of individuals/households along with expected expenditure. Parties will be expected to provide details regarding all such promises separately. They would also need to show the income source required to fulfil all electoral promises.

Rationale:

• EC’s aim to help voters make an informed choice. 
• To assess the financial feasibility of implementation of such promises within the financial space available.
• To seek details on the ways of revenue generation for meeting promises and its impact on the Fiscal Responsibility and Budget Management Act limits.

Implications:

• States and Union governments also would provide information on the receipts and expenditure, which would bring the government’s fiscal health into the political discourse.
• It may eventually put the onus of assessment of proformas on the Election Commission, thereby increasing its power.
• There may arise issue of what constitutes a freebie and what not as a promise of one political party may be a freebie for another and vice versa.
• While political parties making an assessment of what their poll promises cost should be a back-of-the-envelope calculation, such assessments would miss out on the costs that every new scheme or welfare measure imposes on the government machinery.

Way forward:

• India needs to have an institutional mechanismto control wasteful expenditure.
• Instead of having a blanket policy, the state needs to identify the beneficiaryof a particular public policy.
• India needs to have a good tax frameworkfor more social sector expenditure while also ensuring medium-term debt sustainability.