Colour TVs, laptops, mixers, grinders were among the 'freebies' promised and delivered to Tamil Nadu’s voters. Will the trend continue in 2021 despite TN’s huge revenue deficit?

Collage of CM Edappadi Palaniswami of the AIADMK with DMKs MK Stalin on the right against a maroon background
news 2021 Tamil Nadu Assembly Election Wednesday, March 03, 2021 - 09:02

Known as the cradle of populist schemes, Tamil Nadu’s political parties have wooed voters with ‘freebies’ such as colour television sets, laptops, mixers, grinders, table fans and a whole lot more over the years. And although archrivals M Karunanidhi and J Jayalalithaa, who tried to outdo one another with doles, are no more, their fiercely competitive politics is expected to continue this poll season. Though the word 'freebie' is used to describe these promises, both Dravidian parties believe that it has been a vital part of the social justice system which believes in deilvering welfare schemes. 

But in 2021, Tamil Nadu’s finances are in the doldrums. The state went from being revenue surplus in 2012-2013 to revenue deficit the following year. Revenue deficit is the difference between revenue expenditure and revenue receipts, and suggests that the government is not earning enough to pay for its regular expenses. Now, eight years later, Tamil Nadu’s revenue deficit has ballooned to an estimated Rs 65,994.06 crore. 

Tamil Nadu’s fiscal deficit — the difference between the total income and total expenditure —  has also risen to Rs 96,889.97 crore which is 4.99% of the GSDP. The state’s debt, meanwhile, is expected to cross Rs 5.70 lakh crore by March 2022.  

Given Tamil Nadu’s deteriorating finances, the question is — will and should political parties like the DMK and the AIADMK announce populist schemes in their election manifesto? 

Speaking to TNM, DMK spokesperson Saravanan Annadurai says the party will continue welfare politics if elected to power in 2021. In many ways, it was the DMK that first instituted the culture of populist schemes, when CN Annadurai in 1967 promised three measures of rice for Re 1. That year, the DMK swept to power for the first time. But it was in 2006 that Karunanidhi took populist schemes to a whole new level — promising free colour TVs, 1kg of quality rice at Rs 2, free gas stoves and free gas connections to all women. While the DMK went on to win the 2006 polls, it also ushered in the era of the ‘freebies culture’ 

“In 2006, when our leader (Karunanidhi) announced free televisions, it was ridiculed by so many people. It was a game changer. It created social change. Now, it has made everyone so well-informed. Before the advent of the internet age, people who could not read or write, they could get information from watching the news. A few researchers have researched the positive impact of this colour television and they said it ensured that women had information,” says Saravanan, who adds that DMK’s brand of welfare politics was ‘copied’ not only by AIADMK’s Jayalalithaa but by other states as well. 

‘Cannot move away from this path’

Saravanan, however, says that calling the populist schemes as ‘freebie culture’ is an insult. “I would call the person an ignoramus for not being aware of the socio-economic situation of the people of Tamil Nadu,” says the DMK spokesperson, “In 2006 we also gave free gas stoves and subsidies were given for gas cylinders. The idea was that women shouldn’t suffer from COPD (chronic obstructive pulmonary disease), as they were using firewood And it was taking a long time for them to cook and all their life was spent in the kitchen itself. We changed that. It was revolutionary. The Prime Minister is now announcing subsidies for LPG cylinders after 15 years.” 

Speaking to TNM, Sushila Ravindranath, a senior journalist and author of ‘Surge: Tamil Nadu’s Growth Story’ says the trend of populist schemes will continue in 2021 as well. 

However, she adds that contrary to popular perception, doles and ‘freebies’ are not bad for people or the market. “It’s not such a bad thing as it’s made out to be. Actually where are they getting the freebies from? They are buying it from the people (market), so it keeps the whole thing rolling a bit. People aren’t sitting back just taking freebies as it is perceived to be. It gives them an incentive to do better in life. Tamil Nadu is one of the best performing states in the country, if they had just been dishing out freebies without thinking about investment, then how will Tamil Nadu be in the front? I know that it’s one of those common things to criticise the governments about, but it’s done a lot of good.” 

She cites the free television scheme by the DMK and the free mixer and grinder scheme by the AIADMK as examples. “In remote areas, for quarry workers, it is the television which kept them going. They had nothing else to look forward to. I heard it from a police source, that it kept crime down. When they started giving mixers, grinders...think of a domestic worker, if she got a mixer and a grinder, she could grind maavu (batter) for five days. So she could work for more houses and make money. Each thing has a reaction.” Moreover, it’s not just ‘freebies’, she points to welfare schemes like the fixed deposit scheme for girl children that have helped raise the Tamil Nadu’s social development indicators. 

Like Sushila, Ramu Manivannan, writer and head of the department of politics and public administration at Madras University, also says that the state’s political parties will have to list populist schemes in their manifestos this time around as well. “The AIADMK and the DMK have to keep a huge constituency of women voters in mind,” he says, adding that political parties are “prisoners” of their own ideas as voters expect such freebies every election.  

‘Freebies goes against idea of governance’

Former IAS officer MG Devasahayam, however, says that while schemes like the noon meal schemes - by former CM Kamaraj and later MG Ramachandran - were brought in with good intentions, it was overtaken by populism by handing out free gadgets. ‘Freebies’, he says, goes against the very idea of governance.  “India is a welfare state, which means you help those who can’t help themselves. That's the basic concept. You can’t reduce the whole population into mendicants. Basically it is against the very form of governance. Once you start there it spreads like a disease,” he says, adding, “You must enable the people to buy this. The state’s responsibility is to act like a catalyst - improve the economy so people can buy these things on their own. States mendicanising them is also killing their self-respect.” 

M Rajshekar, a journalist and author also says Tamil Nadu is seeing welfarism blur into populism. “From where I stand, TN is seeing welfarism blur into populism. The first is developmentalist, the latter is non-productive and geared towards popularity. With that, you have the state redeploying funds from health/education/etc towards freebies,” he says. 

In his book, ‘Despite the State: Why India Lets Its People Down and How They Cope’, Rajshekhar points to a ‘perplexing pattern in Tamil Nadu’s health numbers’. He writes, “On some fronts, there was steady improvement. Nearly all babies born in the state were delivered in clinics. Institutional deliveries climbed from 87 per cent in 2002-2004 to 98.9 per cent in 2012-2013. On a set of other fronts like infant mortality rate (IMR) and maternal mortality rate (MMR), the state’s numbers had worsened: the number of pregnant women who got antenatal care fell from 98.8 percent in 2002 to 90.7 per cent in 2013. The number of children who got full vaccination fell from 81.8 percent in 2007-2008 to 69.6 percent in 2015-2016.”

“The dipping immunisation numbers coincide with Amma baby kits,” he says, referring to the scheme launched in 2014 by Jayalalithaa for all babies born in government hospitals and primary health care centres. In his book, Rajshekar writes that instead of tackling issues like poverty, caste and gender discrimination, Tamil Nadu was choosing to “polish” selective metrics like IMR and MMR to suggest wider gains in public health. It was using “decorative programmes” like the Amma Baby Care Kits to buff up the CM’s image, he writes. 

Balancing welfare and finances 

And while the DMK and AIADMK governments have used revenue from liquor sales to partly finance the slew of welfare schemes, this is no longer enough. Tamil Nadu has seen its revenue fall considerably in recent years, with experts pointing to fall in tax revenue, delay in releasing funds from the Union government, expenditure on welfare schemes as the reason for the revenue deficit. Finance Minister O Panneerselvam had also noted during his recent Budget speech that the Union government’s decision to levy cesses and surcharges was undercutting the state’s revenue. Moreover, the COVID-19 pandemic hit Tamil Nadu hard, with the state having to bear huge expenses. 

So how does a government deliver on its promises while also keeping the state’s financial burden in mind? 

DMK’s Saravanan alleges that the AIADMK government has mismanaged the state’s finances. “The main reason for the erosion of finances is that they (AIADMK) have mismanaged the state. If you have an optimal fiscal management, the finances wouldn’t have dived deep down. When DMK comes to power, we will definitely ensure that the finances and revenues pick up. If we stop pilferage, stop floating unnecessary tenders, if we prevent this, we can manage money. And apart from this,Tamil Nadu industrial growth was always phenomenal. But these people ensured that industries went outside the state,” he says.  

Ramu Manivannan, however, says that parties can trim their welfare budgets to keep the state’s finances in order. “Some welfare schemes you can make some adjustments, Some are inevitable, things like Pongal hampers can continue. Other programmes they can reshuffle. Or budgeting can be redone,” he says. 

Sushila says Tamil Nadu’s finances should get back on track once the economy picks up. “We are going to have bad years for three-four years. Because the lockdown really killed us, like every other state But things are moving a bit, factories are working. I am told that auto components are filling up, retail is picking up. I see things in the shop. But nothing is going to happen overnight.” 

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