Populism Is Getting Out Of Control; Time Politicians Stem The Rot

Till a few months ago, Prime Minister Narendra Modi was the only prominent politician who openly spoke against freebies and populism. But that, alas, was till the results of the general elections were announced. Since then, he has not maintained the tempo as regards opposition to the freebies culture. Ironically, his government has come up with more measures that can be called populist. One such is Wednesday’s Cabinet decision to include all those aged above 70 years, irrespective of income, under the flagship scheme Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB PM-JAY). This comes close on the heels of the Unified Pension Scheme (UPS). Understandably, the line dividing welfare schemes from freebies is quite blurred. Further, it was not that Modi himself never peddled freebies; the Pradhan Mantri Kisan Samman Nidhi (PM-Kisan), for instance, is just that. On the whole, however, the Modi government has not been so much into promoting people-pleasing policies and programmes. An example is the persistently high prices of petroleum products; even when the international crude becomes cheaper, petrol and diesel cost dear to the man in the street. Similarly, the NDA government, unlike the UPA regime, has not announced massive, revenue-guzzling plans like the rural employment guarantee scheme.

Against this backdrop, the government’s newfound emphasis on welfare schemes is quite unwelcome as the ulterior goal is clearly political. Having suffered an unexpected setback in the general elections, with the ruling BJP failing 32 short of the magical number of 272, now the government is trying to mould policies to woo the voter. ‘AB PM-JAY’ is part of that exercise. It aims to benefit approximately 4.5 crore families with six crore senior citizens. The scheme entails free health insurance cover of Rs. five lakh on a family basis. It is not just the Central government that is enhancing stress on welfarism; the BJP-ruled state governments are following suit-and promise to do more. The recently announced budgets of five states, including Maharashtra and other BJP-ruled states like Madhya Pradesh, Odisha and Rajasthan, have pegged their average fiscal deficit at 3.2 per cent of state GDP, 20 basis points higher than their interim budgets earlier this year mainly because of a rise in their revenue spending on populist measures, according to Elara Securities, a finance and economic research firm.

Worse, the saffron party’s embrace of populism is getting tighter. Haryana, where its electoral prospects are reportedly bad, has waived water dues for farmers, slashed prices of cooking gas for poor families, and announced allowances for unemployed youth. Maharashtra, where again the BJP is not likely to do very well in the forthcoming Assembly elections, has increased the fiscal deficit target to 2.6 per cent of state GDP for the current fiscal from 2.3 per cent in an interim budget in February. The reason is the same: more handouts. Non-BJP parties have nothing better to offer on fiscal prudence. The Congress-ruled Himachal Pradesh is finding it difficult to pay salaries to state employees. Other parties too are steeped into mindless populism. This is not sustainable. Only politicians can solve this problem because they have created it in the first place. Let’s hope this maturity dawns on them and they do it.