Major political parties, without exception, resort to the dubious practice of announcing ‘freebies’ — unpaid-for welfare measures ranging from free electricity, bus rides, bicycles, laptops, refrigerators, and unconditional cash transfers to girls and women — as elections draw near. We’re witnessing this play out now again as Kerala, West Bengal, Tamil Nadu and Assam go to polls later this month.
In economic terms, freebies have been rightly frowned upon for being cash transfers or other subsidies (free power, bus rides) that eat into resources meant for creating durable assets. Politically, they have drawn flak for conferring an unfair advantage on an incumbent party, as these doles are typically announced closer to polls. A competitive culture of bidding up doles only ends up vitiating free and fair elections. Yet, freebie promises look here to stay, more so unconditional cash transfers (UCTs) to women. For instance, the highlight of the manifesto of Dravida Munnetra Kazhagam is the offer of a ₹8,000 coupon to women in households below the income tax bracket, to buy household electronic goods. Similarly, the United Democratic Front in Kerala promises free bus rides for women, and ₹1,000 per month for college girls. The Trinamool Congress’ manifesto builds on its flagship urban cash transfer (UCT) scheme for West Bengal, Lakshmi Bhandar, raising it to ₹1,500 for general women and ₹1,700 for SC/ST women. The BJP’s manifesto is not yet out, but an outreach to women cannot be ruled out — akin to transfers made in Bihar, Maharashtra, Madhya Pradesh and Haryana. Apart from UCTs, free ration, transfers to farmers and free electricity are important aspects of India’s welfarism.
The Economic Survey 2025-26 expresses reservations over UCTs to women. The States implementing them increased more than five-fold between FY23 and FY26, with around half of these States estimated to be in revenue deficit. Such transfers are 0.19-1.25 per cent of GSDP and 0.68- 8.26 per cent of the total budgetary expenditures. The 16th Finance Commission has observed that UCTs could account for 20 per cent of total subsidy spending. Power subsidies too account for a major chunk.
As the Survey clarifies, UCTs to women improve consumption, food security, and short-term income stability, but “do not consistently improve child nutrition, educational outcomes, or enable sustained exits from poverty”. For the latter, “investments in health, education, nutrition, childcare, or growth-enhancing public expenditure” are essential. Some freebies create enduring gains — such as Amma Canteens in Tamil Nadu, health insurance, and pensions for ordinary people. As the Survey suggests, freebies can be reformed by making them ‘conditional’, or linked to educational outcomes, such as Brazil’s Bolsa Familia or the midday meal scheme. Their announcement should not coincide with elections. A shift away from UCTs will help.
Published on April 6, 2026