Economic impact assessment essential before distribution of freebies: SC told

An economic impact assessment is essential before distribution of freebies, the Supreme Court has been told by a petitioner who has sought constitution of a committee of experts to examine the practice without adequacy of budgetary provisions. The submission has been made in a PIL filed by lawyer Ashwini Upadhyay seeking action against political parties for irrational freebies.

Senior advocate Vijay Hansaria, on behalf of the petitioner, submitted that two highest economic bodies of the country have expressed concern over long-term impact on distribution of freebies by states without proper fiscal and budgetary management. ”It is submitted that state governments have been borrowing money even when the loan from Government of India is outstanding without complying with requirements of Article 293(3) and (4). It is necessary to have a strict enforcement of these provisions including a ‘system of credit rating’ being introduced for grant of credit facilities to the state government,” the submissions, filed through advocate Ashwani Kumar Dubey, stated.

The petitioner has sought constitution of a committee of experts to examine the practice of making electoral commitments involving financial resources (freebies) without adequacy of budgetary provisions and suggest remedial measures; It has also sought to formulate a comprehensive policy to reduce debt to Gross State Domestic Product’ ratio of states and suggest institutional mechanisms to monitor and forewarn incipient signs of serious strained finances of states.

The top court had on August 3 asked stakeholders like the Centre, Niti Aayog, Finance Commission and the RBI, to brainstorm on the ”serious” issue of freebies announced during elections and put forth constructive suggestions to tackle it, saying no political party will oppose such handouts or like to debate it in Parliament.

The court had hinted at ordering setting up of a mechanism for suggesting measures to the government to deal with the issue. The apex court had said all stakeholders should think on it and give suggestions so it could set up a body to address the issue.

It had on January 25 sought replies from the Centre and the Election Commission on the PIL seeking direction to seize the symbol or deregister a political party that promises or distributes ”irrational freebies” before polls, saying it is a ”serious issue” as sometimes freebie budget goes beyond a regular budget.

The plea, which was filed ahead of the assembly polls in five states including Punjab, said there should be a total ban on such populist measures to gain undue political favour from voters as they violate the Constitution, and the EC should take suitable deterrent measures.