New Delhi, Aug 9 : The petitioner who is against the promises of ‘freebies’ during elections has told the Supreme Court that the country’s two most important economic authorities have expressed their concern about the distribution of the promises by the state administration.The petitioner also stressed that prior to distribution and/or the promises of freebies it is necessary to conduct an “economic impact evaluation” is vital to ensure an economically sustainable economy. Senior Advocate Vijay Hansaria, on behalf of the petitioner advocate Ashwini Upadhyay stated: “It is submitted that two of the top economic institutions of the country have expressed concerns and long-term implications of the distribution of freebies by states that do not have proper budgetary and fiscal management.It is suggested that prior to the distribution or the promise of gratuities, an “Economic Impact Assessment’ is essential to ensure a sustainable economy.”
The submissions were made in an PIL that was filed by Upadhyay seeking legal action against political parties over “irrational gratuities”.
Hansaria claimed that, pursuant to Article 293(3) of the Constitution the state government is not allowed to take out any loan or borrow funds when the loan of the Union government is not in full and in the event of such a situation borrowing is permitted only with the approval of the Centre and it is able to apply any conditions it considers appropriate in terms of the clause (4).
“It is claimed that the state authorities have been able to borrow money even though the loan from the Government of India is outstanding and not in compliance with the conditions of Article 293(3) and (4).It is imperative to ensure strict observance of these provisions, which includes a “system of credit ratings’ that is being implemented to allow the grant of credit facilities to state governments” according to the submissions made through advocate Ashwani Kumar Dubey.
The petitioner asked the top court to establish an Committee of Experts to make recommendations after studying the process of giving electoral promises that involve the use of financial resources (freebies) in the absence of adequacy of budgetary provisions.They also suggested solutions, including the formulation of an overall policy to reduce the debt to the GSDP (Gross State Domestic Product) ratio of the states, develop the principles of financial discipline and sustainability of debt of the state’s administration, and create an Economic Impact Assessment module to be published prior to any freebies being announced or distributed by the state governmentor political parties, etc.,
On August 3rd the Supreme Court, while hearing Upadhyay’s PIL acknowledged that some assistance for the poor is needed however, it also wanted to know about the effects of gratuities on the overall economy.The court solicited suggestions from the various stakeholders and recommended the establishment of an expert panel of experts to examine the issues that come with “irrational giveaways”.
The Supreme Court asked all participants, such as the Centre the NITI Aayog as well as the Finance Commission and the Reserve Bank of India to come up with ideas on problems that arise with the announcement of freebies during polls.
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