FREEBIES can enable politicians to win elections. But they will make them lose a nation. If the politics of loan waivers, higher minimum support prices for foodgrains, and unemployment dole (read MGNREGA) for rural folks continue, there will non-engineered strife in the country. Freebies may work for a time – they have worked for seven decades now – but in the end they will invariably lead to socio-economic disasters. The levels of violence, anger, frustration and crime are already high. The country will be paralysed as its citizens shed blood. Hence, this may be the time to take governance action in a bid to save a country.
Yet again, there is a wave of farmers’ loan waivers, and direct cash incentives for farmers. Telengana, for instance, doles out Rs 4,000 an acre per season, or Rs 8,000 a year, to land-owning farmers. Over the decades, several political regimes have waived off the loans of the farmers, one after another after making such promises in their election manifestos. This has given a fillip to the process and defined it as a successful election strategy. But now, there seems to be an acceleration without any brakes. As the sizes of the sops get bigger, there isn’t enough money to finance them. To successfully run such ‘welfare’ economies, even if it is for a few years, results in higher tax burden on those who pay the taxes – the business community and middle class. In the end, the economy derails and more so as the money is spent in an unproductive fashion. This results in higher fiscal deficits, and even higher inflation. In the short-term, the freebies help the beneficiaries, but cause long-term harm. For example, the one-off loan waivers help rural households immediately. But soon, within a year or two, the families get indebted, and return to Square One. There is a never a permanent way out. What’s more, farmers’ incomes remain low, and inputs remain expensive. Within no time, the farmers are staring yet again at high debts, low profits, and possible starvation. They are ready again to contemplate suicides. It is a cycle that repeats again and again – one loan waiver needs another one after a few years, and then again and again.
What happens to the rural society in general? Doles and incentives de-incentivise many to work and earn money. They make them feel that some government will soon help them and, hence, they don’t need to help themselves. External help is always on the way, although it may take time to reach them. But the hope is alive and this is at the expense of what the people can do to make their lives better. Easy money leads to idle minds, which then may turn to crime. More importantly, if no freebies are forthcoming, the people become agitated. This is especially true of the youth, who wish to revolutionise the so-called system. That is a scary thought, not just for politicians, but for the nation as a whole.
gfiles cover story is on how the agrarian crisis is a bomb waiting to explode analyses, how we are creating a nation of unemployed people. The issue to be resolved should have been to create employment, make agriculture viable rather than to waive off the loan of farmers or restructure the loans of fraudulent industrialists and industries. India has to resolve its problem within its own needs and desires and not by aping the ‘vikas models’ at the instance of forces which only look upon her as a ‘market’. Wake up! No nation can be a market without happy and enriched citizens.