Financial Viability of Election Promises

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    In Context

    • Recently, the Election Commission of India asked parties to explain how they plan to finance poll promises.

    More about the news

    • About:
      • The Election Commission of India wrote to parties proposing that they spell out ways and means of raising additional resources to finance the promises.
      • EC also asked them to assess the impact it would have on the fiscal sustainability of the state or the Central government.
    • Issue:
      • Elections are held frequently in India, providing opportunities for political parties to indulge in competitive electoral promises, particularly in multi-phase elections.
        • These promises are made without having to spell out their financial implications more particularly on committed expenditure.
      • Most states lack the cushion to spend money as freebie & irrational promises. 
        • The states are unable to save state finances from going down into fiscal deficits.
      • Freebies:
        • The Supreme Court also recently observed that the issue concerning freebies is an important one and requires debate.
    • Detailing the resources, spendings & impact:
      • The parties will have to detail how they propose to raise the additional resources to finance the scheme or schemes if voted to power – like whether they plan an increase in tax and non-tax revenues, rationalise expenditure, go for additional borrowings or do it in any other manner.
        • EC, in its letter to all recognised national and state parties, has prescribed a standardised disclosure proforma for them to
          • Declare quantification of the physical coverage of the schemes promised, 
          • Financial implications of the promise and 
          • Availability of the financial resources. 
      • The impact of the additional resource raising plan for fulfilling the promises on fiscal sustainability of the State or the Union Government will also have to be specified.
    • Criticisms:
    • The EC’s move drew a sharp reaction from the main Opposition which said that this is not the business of the EC. 
      • Providing electricity, water, schools and other facilities to the people is the core responsibility of any government.
    • Critics also quoted that this goes against the very essence and spirit of competitive politics.

    Freebies

    • Before every election, political parties in India promise certain health and education services, besides free water and electricity up to a limit. 
    • Many parties also promise what have come to be known as freebies such as television sets, laptops with the internet, bicycles, scooters, monthly petrol quotas, cell phones, and even ghee! If the promises are sincere, the winning party or coalition goes on to distribute these items among the people.
    • Reasons for giving these Freebies:
    • The failure of the parties and governments to deliver development to the ordinary people has led to the increased phenomenon of “freebies” and the parties have to resort to it to win over the voters.
      • If you have done work for five years, then you won’t have to resort to it.

    Issues with Freebies

    • Financial irregularity: 
      • The reckless spending of the taxpayers’ money on freebies is neither a recognised policy/custom nor is sanctioned in a court of law. 
      • It is a blatant financial irregularity that amounts to bribing voters using public money solely for gaining an advantage in electoral politics.
    • The burden on Public Exchequer: 
      • If states continue with fiscal profligacy, they will be heading towards unsustainable high debt with catastrophic consequences for macro-economic stability and the ability of India to sustain high growth. 
    • Vote bank politics: 
      • Political parties’ promises to lure voters in their favour is analogous to bribery and undue influences.
      • Their attitude seems to be – if we lose, we do not have to deliver, but if we win then we shall cross the bridge when we get to it. 
      • Hence, they have set out to make promises without a sense of responsibility as to whether it will at all be feasible to deliver on even some of them.
    • Lacking equity or fairness: 
      • Freebies serve even those who are capable of managing on their own at the cost of those who can not pay for their own. This promotes inequality.

    Significance of declaring ways of raising resources

    • Impact of poll promises:
      • Empty poll promises have far-reaching ramifications.
      • View that emerged was that the poll watchdog cannot remain a mute spectator and overlook the undesirable impact of some of the promises on the conduct of free and fair elections. 
    • Standardisation & informed choices:
      • The EC said that disclosure of the promises in a prescribed format will bring in standardisation in the nature of information and help voters compare and make an informed decision. 
      • This will help maintain a level playing field for all political parties and candidates.
    • Model Code of Conduct:
      • To make these steps mandatory, the EC plans to propose an amendment to the relevant clauses in the Model Code of Conduct.

    Election Commission India

    • The Election Commission was established in accordance with the Constitution on 25th January 1950.
    • The Election Commission of India is an autonomous constitutional body responsible for administering Union and State election processes in India.
    • The body administers elections to the Lok Sabha, Rajya Sabha, State Legislative Assemblies, State Legislative Councils and the offices of the President and Vice President of the country.
      • It is not concerned with the elections to panchayats and municipalities in the states.
      • For this, the Constitution of India provides for a separate State Election Commission.

    Source: TH