Welfare or Freebie Culture?


Another bout of populism in 2024 at a time when public sector debt has ballooned to some Rs 450 billion, with many skeletons still hiding in closets, can only be detrimental to the country’s interests

By Jan Arden

There has always been a seemingly unending debate among economists and international assistance institutions whether universal benefits schemes or those targeting the more vulnerable are more effective at decreasing inequalities and reducing the gap between the haves and the have-nots. Arguments based on data mining and country evidences have been presented in support of both schools of thought even as the more complex realities of today have superseded last century’s raging debates without what we might acknowledge as a definitive consensus.

We have here moved away from late Sir Anerood Jugnauth’s comments about ration rice being used for dogs and Pravind Kumar Jugnauth, as inexperienced Finance Minister, trying his hand at means-testing and targeting of various universal benefits earlier this century. Both landed their proponents and the MSM in political hot waters as the Labour Party lambasted those attempts to dismantle the “Welfare State”.

Independence, human rights and dignity

This was a quintessentially political battle, particularly for those who had fought hard and long for nationhood, independence, human rights and dignity and who laid down the fundamental elements of that welfare state, even with the very limited means of the times: a universal pension scheme, free access to health care and pharmaceuticals, free primary and later secondary education, a decent local tertiary education infrastructure, subsidised essential commodities, inflation and salary compensation mechanisms, a broadly dedicated civil service, and so on.

With economic development, whose success had benefited from large previous investments in our level of literacy and education, private players began investing in parallel to the State in education, health and medical schemes for their employees and cadres, private pension schemes, but there was no way the State could renege on the welfare state fundamentals for the wider population, to which we may add the availability of affordable public transport, water, electricity and fuel at the pumps.

By and large, independent observers and the majority of the population must feel relieved today at the general staff quality, the robustness and general reliability of our public health infrastructure, including its several specialised units, despite the occasional hiccups or some unacceptable lapses under the pandemic duress (e.g., the dialysis saga at Souillac Hospital), even when private clinics provide better conditions and private facilities for certain procedures and operations.

By the same token, our colleges, before the Nine-Year Schooling reform, had remained reasonably performing despite many more private and better resourced units that have sprouted over the past ten years or more. For its part, the tertiary sector has boomed with both private and public offerings of recognised international levels. There are still numerous battles out there, such as redrafting the educational development to cater for those tossed aside in the extended streams, making human values and relationships central to child development, improving the technical training and skilling opportunities, and raising the international rating and profile of at least the flagship of our public universities.

But overall, the debate about welfare or targeting has shifted since the 2019 elections, and the reversal of the MSM targeting philosophy into an outright populist approach, most evident with the pension promise to the elderlies that caught all Opposition parties somewhat off-guard. Promised “freebies” became toast, the recipient audiences overlooking the fact that populism and freebies such as these and others would be paid for from their own pockets through the national budget.

Kejriwal’s outlandish promises

In India, for those who followed the recent state polls and the electoral intricacies of a more complex nature, the question of freebies has become a hot and controversial issue, the Aam Admi Party (AAP) and its leader Arvind Kejriwal standing most accused of outlandish promises to secure votes. OpIndia reported earlier this year:

“Kejriwal promised 300 units of free power to every home in Punjab if his party wins in 2022. As per Kejriwal, the AAP government in Delhi is providing 200 units of free electricity to each family… Kejriwal also promised ‘free money’ to all Punjabi women, regardless of their financial situation or needs.”

The method worked in Delhi and Punjab but has brought Delhi utilities and municipal finances threadbare. Arvind Kejriwal has of course defended these free schemes by arguing that as a state citizen, one is entitled to free services from the government, which one must get. But “he deceives people on how the full weight of these schemes is clandestinely shifted to the general public, and that the gain provided by these schemes is only ephemeral”.

Kejriwal’s party promises and the underlying political philosophy to gain political clout have failed lamentably in the latest Gujarat and Himachal polls, where the AAP secured 5 and 0 seats respectively. We cannot delve here in all the factors surrounding those poll results, but certainly the latitude of a major political party deliberately offering freebies which ultimately will have to be paid for from public funds, taxpayers, and consumers, while placing state utilities and corporations in financial distress, has become hugely controversial. The more so as it forces other parties to somehow follow suit, thus derailing either the country’s long-term interests or its economic fundamentals.

Not all electorates are as mature as those of Gujarat and Himachal where the AAP received such a discomfiture in terms of seats. We are here still bearing the costs for the MSM pension and other freebies of 2019, which, coupled with the dilapidations paid for from the public purse at the Betamax, BAI/Bramer, MK and SBM debacles, among others, the “borrow, tax and spend bonanza” through the Covid pandemic, have brought our country to its knees, with a depreciated rupee, a bankrupt Central Bank, a high inflation and cost of living, a forex crisis, a lack of credibility for serious investors and a mountain of debts, leaving it vulnerable to any external event. Read More… Become a Subscriber

Mauritius Times ePaper Friday 16 December 2022

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