Evidence shows budget handouts may not get Modi or BJP any more votes than they would have got otherwise. Samajwadi Party lost 2017 UP polls despite such sops.
The BJP unveiled a populist budget Friday with the hope that the new sops will garner votes for the party in the upcoming elections. In fact, union ministers – Jayant Sinha and Ram Vilas Paswan – claimed that the budget will help the National Democratic Alliance cross 400 seats. The prevailing sentiment among analysts is that the budget made for good politics by the Bharatiya Janata Party (BJP).
This stems from a common belief in Indian politics that handouts help win elections. In our opinion, there is no evidence that handouts and populist budgets have had an impact on the vote share of a party in an upcoming election. These handouts may not get Narendra Modi or the BJP any more votes than they would have received otherwise. Announcing populist elements in the budget are like throwing darts in the dark, which is why this budget may not necessarily be good politics.
The argument that handouts win elections rests on an elementary yet fallacious idea that ‘money given before an election’ helps a party win elections. The Congress party, while ridiculing the budget, made similar promises a few days ago when it said it would implement a minimum income guarantee scheme for the poor if elected to power.
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There is no evidence that such populist politics works. For example, in Tamil Nadu and Puducherry, the Dravida Munnetra Kazhagam (DMK) government offered multiple and very particular benefits to citizens between 2006 and 2011 but still lost the elections of 2011.
Similarly, in Uttar Pradesh, between 2012 and 2017, the Samajwadi Party (SP) government, led by Akhilesh Yadav, gave pension benefits to over 5.5 million (or 55 lakh) residents through the Samajwadi Pension Yojana, gave away about 1.5 million (15 lakh) free laptops, and offered to provide free smartphones to over 25 million (2.5 crore) people after the next elections. However, when the results came out, the SP government had lost to the BJP, whose campaign had been run from Delhi. There was a massive swing in votes away from the coalition led by Akhilesh Yadav, which won only 54 seats in a house of 403 legislators.
A classic example that observers often cite is the Congress’s announcement of a farm loan waiver in the budget of 2008. The Congress may have won the 2009 elections, but there is no evidence to suggest that the loan waiver had clinched the election for the party.
Why do populist measures fail to win votes for ruling parties in India? There are three main reasons. First is the simple tradeoff between the general economic condition of a voter and a sudden infusion of a little cash. Second is that voters, despite all the media attention, have some difficulty in performance attribution. Third, there is a large gap between promises and delivery of services, and voters are very aware of this.
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Ruling parties face a very particular problem with promises or handouts made just before an election. First, let us take the case of giving farmers (or the middle class) a direct cash transfer and ask ourselves if it would influence the vote. If farmers are doing poorly and have seen no improvement in their financial situation over the past few years, would Rs 6,000, provided over the span of a year, get them to vote for the BJP, especially if they were either first-time BJP voters in 2014 or had never voted for the BJP?
For farmers who are not doing poorly but have seen no real improvement in their economic condition, would a cash transfer of Rs 6,000 per year swing their vote to the BJP? Finally, for farmers doing well, would Rs 6,000 a year make a difference? The only circumstance under which farmers (or people in the middle class) will switch their vote to the BJP is if they believe that this temporary infusion of cash before an election is a credible signal of a fundamental change in their economic position. The same logic may also be applied to the middle-class voter eligible for the income tax sops announced by the government.
Failed efforts made by various state parties to improve their electoral results through pre-electoral handouts is sufficient evidence that voters do not see handouts bringing about a fundamental transformation. As with the distribution of cash before an election, voters will take the money they get and vote how they choose.
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Second, there is plenty of research which shows that voters have difficulty in performance attribution. In their book Ideology and Identity: The Changing Party Systems of India, Pradeep Chhibber and Rahul Verma have shown that voters often cannot identify which party, or even, which level of government has introduced a particular welfare policy. This may hurt the BJP’s ability to reap electoral benefits from the announcement in states that are not ruled by the party.
Third, there is a large gap between a promise and the delivery of that promise. The Indian state is notorious for its poor record in service delivery. For instance, the country loses approximately Rs 40,000 crore a year in leakages in the public distribution system alone. Thus, even if a government announces a policy, it is unlikely to reach all the intended beneficiaries.
Will this budget help the BJP in subduing farmer and middle-class dissatisfaction and controlling the narrative? Maybe. Will it be a game-changer and swing the election in its favour? Highly unlikely.
Pradeep Chhibber and Pranav Gupta are with the University of California, Berkeley. Harsh Shah is an alumnus of the same university and now works in the private sector.
Bashing comments / reactions to Sandip Roy are mostly from males. Surely, his effort did not go in vein!!
An apt analysis of the little impact of doles on the electoral politics. A correct assessment. But it lost its way when you wrote, ” Will this budget help the BJP in subduing farmer and middle-class dissatisfaction and controlling the narrative? Maybe. Will it be a game-changer and swing the election in its favour? Highly unlikely.” Here is the issue of subjectivity.
The farm insurance scheme seems to be fizzling out. Universal Medicare for 50 crore Indians has been launched with a modest budget of 2,000 crores and is already running short of money, with tiny coverage. These initiatives cannot swing a national election.