SC wants political parties to suggest how to regulate 'freebie culture'

Govt says freebies inevitably lead to economic disaster

The Supreme Court (SC) said on Wednesday that the Centre should take the opinion of stakeholders like the NITI Aayog, Finance Commission, Reserve Bank of India, Law Commission of India, and the Election Commission to come up with “constructive suggestions” to address the issue of irrational freebies.

The government, on the other hand, told the court that the distribution of freebies inevitably leads to “future economic disaster”. It was in response to a petition against the so-called ‘freebies’ culture in the country, particularly during elections.

Solicitor General Tushar Mehta, appearing for the government, said, “Populist schemes distort the decision-making of voters. This is the way we are heading towards an economic disaster,” he said.

The plea sought directions to the Election Commission to not permit political parties to promise or distribute irrational freebies from the public fund before elections, and to deregister political parties which do so.

Directing all parties to make suggestions about the formation of a body that can be constituted by the court to examine the issue, the SC scheduled the next hearing for August 8.

Experts said the Finance Commission is not a permanent body. “So how can its opinion be sought if it has not been constituted now?” asked Alok Prasanna Kumar, co-founder and team lead of Vidhi Centre for Legal Policy.

Siding with the petitioner, the Solicitor General suggested that the EC apply its mind to look into the issue. The court refused to entertain this suggestion, saying that the EC cannot be forced to look into the issue if it does not want to.

The counsel for the EC said they had already filed their reply, saying such regulations on freebies can be included in the Model Code of Conduct (MCC).

Meanwhile, Prasanna said it is not possible to regulate how states spend their funds. “Eighty to ninety per cent of the funds are released to the states by the Centre. A part of it is tied and the other part is the untied fund. So how can the law regulate how the states spend this untied fund?” he said.

Referring to a judgment 19 years ago, the court said the EC had not done anything about this issue. “There are benefits to the downtrodden people, and it is not that the rich are deprived of such benefits.” the court said. 

The court observed that regulating freebies via MCC may not be feasible. “MCC comes into play just before elections. The four years before MCC comes into play are unaccounted for,” the court said.

Disagreeing with the Centre, Senior Advocate and politician Kapil Sibal said the EC should be kept out of this matter as it is an economic and political issue. “Let there be a debate in Parliament,” Sibal suggested.

The court expressed its apprehension about the debate, saying that everyone wants freebies these days. “These are all-policy matters. Let the Finance Commission, political parties, opposition parties, and other stakeholders interact, come up with suggestions and submit their report,” the court said.

Meanwhile, Prasanna said it is not possible to regulate how states spend their own funds. “For most states, a large per cent of the funds they receive are released to the states by the Centre. A part of it is tied to specific programmes and schemes and the other part is untied. So how can the law regulate how the states can append this untied fund?” he asked.