Modi’s ‘Billionaire Raj’ is making India more unequal. So, freebies are a necessity

Illustration: Prajna Ghosh | ThePrint

In the recent past, Prime Minister Narendra Modi has railed against “freebies”, claiming that “revdi culture” is “very dangerous for the development of the country”. Fast forward to 18 September 2024, when the Congress party unveiled its flagship promises for Haryana, promising a Rs 2,000 monthly transfer to women, cooking gas at Rs 500 per cylinder and two lakh government jobs, among others. The next day, the Bharatiya Janata Party announced that it would offer women in Haryana Rs 2,100 per month, cooking gas at Rs 500 per cylinder and fill two lakh government jobs. So much for the BJP’s principled aversion to “revdis”. 

The inescapable reality is that economic distress—despite strong headline GDP numbers—is forcing political parties to respond to people’s felt needs. This has been exacerbated by the Modi government’s policies, which have sharpened inequality and denied the benefits of growth to the majority. The strong demand for “freebies” is preventing the government from addressing the biggest obligations of modern India: providing affordable, quality healthcare and education for all citizens. 

Ironically, when Modi made his revdi culture remarks, he had already implemented two of the largest cash transfer programmes in the world. PAHAL—a continuation of UPA-era LPG subsidy—and a Rs 6,000 per year transfer to landowning farmers under the PM Kisan Samman Nidhi scheme. 

This extends to BJP-ruled states. Many believe that the BJP’s 2023 Madhya Pradesh Assembly election win was partly due to the Chief Minister Ladli Behna Yojana, under which 1.2 crore women received a Rs 1,000 monthly payment starting 10 June 2023. Then-CM Shivraj Singh Chouhan had announced that the sum would rise to Rs 3,000 per month. Similarly, the BJP-supported Maharashtra government recently announced a Rs 1,500 monthly payment to over one crore women in the state. None of this could have happened without Modi’s approval. 

So, what explains this apparent duplicity? First, Modi has to cater to his upper-class, upper-caste supporters who have a louder voice. Yet, a majority of low-income, rural voters are still dependent on state benefits and have little interest in Right-wing economic ideas. This is one reason Modi viciously attacked both the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) and the National Food Security Act, only to later double down on them—especially when Covid-19 hit. The same people who criticised these policies under Congress remained silent on their deployment by the BJP. 

The Billionaire Raj 

What’s more, the policies of the Modi government over the past decade have directly contributed to increasing demands for government support. Consider the following facts: 

•     India’s GDP growth was much lower under Modi (5.8 per cent in 2014-2024) than under the UPA. (7.5 per cent in 2004-2014, conveniently revised later to 6.8 per cent)
•     Private consumption grew at only around 4 per cent in 2023-2024 even as headline GDP grew at twice that rate.
•     Real wages for agricultural labour grew at an average of 6.8 per cent under the UPA and -1.3 per cent under the Modi government. 
•     According to former RBI deputy governor Viral Acharya, the concentration of economic power in the five biggest business groups has contributed to inflation as larger monopolies have both pricing power and the political influence to lobby for higher import duties, which raise costs for other firms.  
•     India’s “Billionaire Raj” in 2022-2023 was more unequal than the British Raj: the top 1 per cent earn 22.6 per cent of income and own 40.1 per cent of all wealth.

These are just a few factoids that illustrate why the appetite for government benefits has surged in recent years. The genius of Modi’s con job lies in driving the bottom of the pyramid further into distress—through demonetisation, poor GST implementation, and policies that favour big businesses over jobs-generating small and medium enterprises—and then attacking parties like the Congress that attempt to address these issues head-on. Not to forget the final sneaky copy-paste-and-rename manoeuvre. 

Impact of freebies 

Now, you might say, isn’t there a difference between offering a job cushion and rations to the needy and doling out cash and other assets to a broader segment? Well, that’s not what critics were saying when midday meals, MGNREGA, and the Food Security Act 2013 were being rolled out. Back then, they were dismissed as doles and handouts. Until, of course, Modi adopted them, and such policies magically transformed into “masterstrokes”. 

There is evidence that some “freebies” do work. The Dravida Munnetra Kazhagam (DMK) was pilloried in 2006 for offering free TV sets to households. Yet, a 2009 study found that increased access to TV reduced the acceptability of domestic violence and son preference, increased women’s autonomy, lowered fertility rates, and boosted school enrolment for younger children.  

The Bihar government’s 2006 provision to provide free bicycles to schoolgirls helped increase secondary school enrolment in the target age group by 32 per cent, according to one study. It also contributed to higher participation and pass rates for girls in the 10th standard board exam. Free bus travel in several states has also positively impacted women’s autonomy and their participation in public spaces. 

So, there is a lot of demand for “freebies”, increased by the Modi government’s pro-rich policies, and many of them do have positive externalities. What’s the problem then? It is no secret that India still lags behind many of its peers in providing essential services like health and education. While the private sector can complement, it cannot substitute for the government in these areas. Despite progress in some states, access to affordable and good quality health and education remains a distant dream for the vast majority. It is also no secret that investment in these areas yields the biggest societal payoff.

Amitabh Dubey is a Congress member. Views are personal.

(Edited by Ratan Priya)