The rising cost of poll promises

With Tamil Nadu going to Assembly polls in April-May, AIADMK general secretary Edappadi K. Palaniswami recently made some promises. He announced an expansion of the monthly assistance scheme for women, promising to provide ₹2,000 per month to the woman head of every ration card-holding family; and the expansion of the free travel scheme, which is currently limited to women, to cover men as well. Mr. Palaniswami termed the promises as the “first dose”, with more to be made in the manifesto.

In response, the Dravida Munnetra Kazhagam (DMK) regime deployed two Ministers — S. Regupathy and T.R.B. Rajaa — to criticise Mr. Palaniswami for having “copied the successful schemes” of the government. Mr. Rajaa, who is also a member of the DMK’s election manifesto committee, said that the country would turn its attention to the DMK’s manifesto once it was out, “as was the case in the past.” Indeed, Mr. Palaniswami’s announcement may prompt the DMK to come out with many other assurances at a time when the State government is struggling to sustain its welfare and populist schemes. As the Election Commission of India is expected to announce the poll schedule in late February, the incumbent government has time to launch more populist schemes.

If the AIADMK chief’s two offers are implemented, it would mean an additional burden of ₹40,000 crore annually. In other words, these two components alone would be around 11% of the projected revenue receipts of the State for 2026-27. There is a qualitative difference between the DMK’s Kalaignar Magalir Urimai Thittam, which provides ₹1,000, and the AIADMK’s proposed scheme, Kula Vilakku Thittam, which will offer ₹2,000. While the first scheme covers 1.3 crore people because of some conditions, the second will include 2.23 crore. In addition, this year’s estimated expenditure for the free bus ride is ₹3,600 crore. Its expanded coverage would double the subsidy bill.

For about 15 years, until the mid-2000s, the two parties had a different approach while they were in power. As economic reforms were unveiled in 1991, the AIADMK and the DMK favoured greater space for the private sector, shrinking the role of the government and its enterprises, and experimenting with the gradual reduction of subsidies. In 2002-03, the AIADMK regime led by Jayalalithaa withdrew free power supply for farmers and fixed a two-slab pricing system for rice supplied through the public distribution system. However, she rolled back these schemes when her party performed disastrously in the 2004 general elections.

Since then, the DMK and the AIADMK have been aggressively resorting to competitive populism. In 2006, the DMK said that it would reduce the price for rice supplied through PDS uniformly to ₹2 per kg, distribute free colour television sets to all ration cardholders, and waive off crop loans taken through cooperative societies for all categories of farmers. In September 2008, the regime led by M. Karunanidhi cut the price of rice further to ₹1 per kg. In 2011, the AIADMK government went one step further by providing 20 kg of rice free for all ration cardholders. It also supplied a table fan, a mixer, and a grinder as freebies to every woman covered by the ration card system. In May 2016, Jayalalithaa retained power. Since then, about 2 crore domestic consumers of electricity have been getting free power up to 100 units bimonthly. In 2021, the DMK promised a monthly basic income scheme for women. Those who claim to be alternatives to the Dravidian majors are also no exception to the freebies culture, which seems to have become an all-India phenomenon.

Mr. Palaniswami has not committeed to the restoration of the Old Pension Scheme (OPS) for State government staff. Yet his promises have caused concern among those who follow the State’s finances, which are under strain owing to several domestic and international events. Besides, the DMK regime announced the Tamil Nadu Assured Pension Scheme, effective January 1, as a partial fulfilment of its electoral promise to revert to the OPS. This will, at least initially, further cause stress to the State’s finances.

With his promises, the AIADMK leader appears to have strengthened the hands of advocates of freebies when he should have promoted the agenda of fiscal prudence instead. This is something Tamil Nadu needs.