Do subsidies serve any real purpose? DC finds out

Governments must be prudent says Katari Srinivasa Rao, State President, Loksatta

Most political parties all over the country have been cynically indulging in competitive populism with an eye on garnering votes in elections and coming to power.

They also resort to luring voters with money and liquor and appeal to their primordial loyalties based on caste and religion, region and language.

The situation in Telangana and Andhra Pradesh is no different. Both, the Telangana Rashtra Samiti and the Telugu Desam, that have come to power in Telangana and AP respectively, not to mention the Congress and the YSR Congress  that were trounced in both states, have been liberal in offering short-term sops.

The entire public and political discourse is apparently centred on these sops. In the end, it seems that the public got the same old politics even in the new states!

Take for instance the promise of both the TRS and the TD to waive farm loans. Agriculture has been in a crisis for a long time as is evident from hundreds of farmers ending their lives unable to repay their debts.

Instead of addressing the basic problems afflicting the sector, the ruling parties have offered to waive farmers’ loans.

They forget that the UPA government’s waiver of farm loans worth Rs 65,000 crore did not put an end to farmers’ suicides.

When resources are limited, governments have to use them with prudence and not squander them away on populist, short-term and unproductive schemes.

If those who have defaulted in repaying bank loans are extended loan waiver, it amounts to punishing those who have honestly repaid the loans. As the State Bank of India chairperson put it, farmers in future will not be eager to repay loans in anticipation of another loan waiver.

Have the political parties thought of the repercussions of a loan waiver on the banking system?

The governments in both state cannot fulfil the aspirations of people if they fritter away precious resources on unproductive schemes.

The Loksatta has all along argued that a government has to enable people to lead a life of dignity by standing on their own feet, and not by depending on crumbs thrown at them.

Living standards improved by sops says Kancha Ilaiah, Writer and political commentator

During the 10-year rule of the UPA government, the welfare system of India has deepened.

In a country like India, with a vast population of Backward Classes, Scheduled Castes, Scheduled Tribes and minorities, who suffer due to lack of work, housing, education, and from malnutrition, and in all spheres of life, the only way to improve their lives is to push massive doses of welfare into the system.

The expenditure on welfare schemes and subsidies should not be viewed as a financial burden, but as an investment which gives returns to society in the form of improvement in living standards.

If the BJP at the Centre or the TD/TRS at state-level discontinue subsidies, welfare schemes, farm loan waiver, fee reimbursement etc, the poor masses will suffer from a lack of work and food.

This will fuel a rebellion from the ground-level.

If such schemes are taken away, then social unrest will begin in a manner that the Centre and state governments cannot even imagine. Look at the public wrath against the TRS following reports that it is imposing conditions on availing of the farm-loan waiver scheme

Subsidies and welfare schemes have become a necessary component of Indian democracy. But if subsidies are removed, there will be social unrest across the country, particularly at village-level.

Welfare mechanisms do not have only an economic dimension, they also have social implications.

Waiving loans is a burden on the State exchequer, but that is the only way the poor can get their share from the State. If they don’t get their share, naturally the landlords and industrialists will eat up the budget.

What is the use of six-lane roads and hi-tech flyovers to the poorest of the poor? They need food, good wages for work, shelter and education for their children.

If inequalities are reduced, then the State need not spend money on the poor. But the rich are enjoying all the facilities in the name of their own businesses and properties. What is left to the poor?

In fact, the State is the property of the poor. The State cannot be the property of the rich. Therefore, the poor have more legitimate rights over the State than the rich.

During its 10-year rule, the UPA government had, to some extent, understood this.

It is another thing that they did not get the votes. But if welfare schemes or subsidies are taken away, no government can rule for even five years.