Competing populsim v/s budgeting ethics

By Cleofato A Coutinho
05 April 2012 00:38 IST

The slashing of petrol prices by Rs. 11/- by adjusting the VAT element in the price of petrol made national headlines and the various freebies announced in the budget including the allowances for the unemployed and increase of payment to the aged and the additional Rs. 1000/- for housewives has given a populist touch  to the Goa Budget. While the impetus given to the agricultural sector and the announcement to revive the IT sector are certainly welcome and positive features, the freebies have given an entirely new twist to the ethics of budget making.  

Unlike the Akali Dal victory in Punjab, the victory of the Bharatiya Janata Party was not based on populist promises (though popular promises were made). The vote against the Congress party was clearly a vote against the public perception of a few families attempting to corner the power and deficit in governance including the government being seen as corrupt. In light of such a victory, the question whether the government had to go so much populist becomes critical. Normally such budgets are presented in the fourth year so that the ruling party harvests the benefit at the ensuing election. However in our case the chief minister has honoured popular poll promises in the first year itself. What will happen in the fourth budget is anybody’s ‘guess’.  

When parties compete at populism, this is bound to happen. Karunanidhi promised colour TVs and distributed them after the electoral victory. The promise of free power and uninterrupted power has played wonders for the Akali Dal. Rahul Gandhi promised computers while Akhilesh Yadav promised laptops! Rice at Rs. 2/ per kilo, free rice, free computers, free laptops, free tablets are in vogue. But the question is whether elections are to be fought on competitive freebies.

The Bharatiya Janata Party was first to come out with the manifesto and promised Rs. 2000/- for the aged under the DSS scheme. The Congress party which followed thereafter with their manifesto promised the Rs. 2500/-! Whether such freebies and whether honouring of all promises are in the interest of the state and the economy is the issue the parties must take up while preparing their manifestoes. Competitive populism shall only drain the economy.

Vulnerable sections and economically backward classes have to be helped. That is part of the social justice plank of our constitution. But the limits to which parties resort to in competing at populist measures is a matter of serious concern. To my mind, the distribution of the amounts for the aged ought to be taking into consideration the net income of the family and to be given only in those cases which require state assistance. Frittering away amount from the state exchequer to those who are sufficiently well placed in society and those who are taken care of by their children and/or who have other sources of income is certainly neither social nor justice! The Rupees three lakhs ceiling for the one thousand Rupees to the housewife is too high a cut off bringing a large population within the scheme. Even if that amount was increased depending upon the income levels it would have been a better option.

The unemployment allowance may help in amelioration of the life of the unemployed but there is a danger of loss of creativity and overdependence on the allowances at all times. Experience tells us that once such schemes are started it becomes extremely difficult to withdraw them at a latter date. In fact the amounts under such schemes only go upwards and each government competes with the other in framing schemes.  

In light of the fact that the victory of the present government was due to deficit in governance, it would have been better if the poll promises were honoured in the manner so as that only those who required the helping hand of the state was so provided. That was possible if the amount allowances was tied down to realistic cut off levels and the employment allowance was also tied down to productive work put in by the unemployed.  The NREG scheme was certainly an innovative scheme and if implemented without any element of corruption, it can work wonders for the country. Ours being a tourism related state, some such schemes ought to be worked out  instead of paying amounts as doles. 

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Cleofato A Coutinho

Cleofato Almeida Coutinho is a senior lawyer and one of the constitutional expert in Goa. A member of Law Commission of Goa, he also teaches at Kare College of Law in Madgao.

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Previous Comments

Budget is about management of Government Finances. As long as there is a balance maintained with regards to tax collected and expenditure, there should be no cause for concern. By reducing VAT on Petrol or through other schemes Manohar Parrikar is not merely based on populism but on strong economic logic. Comparing these with Karunanidhi's TV Distribution is Tamil Nadu is absurd and shows the bias and childish knowledge of the author.

In an age where Politicians are criticised for not fulfilling promises and filling their own pockets, if a CM does the complete opposite he should be appreciated.

- Tulasidas Pai, Panaji | 08 th April 2012 16:26

 

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