Nobel laureate Abhijit Banerjee’s take on ‘political freebies’ spawns new debate

Most parties, except the Dravidian majors, disagree with his contention that gifts doled out by governments does not make people lazy. While Dravidian parties count benefits of free washing machines, TVs, ‘alternative’ thought leaders say it is a waste of public money

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Abhijit Banerjee. | File photo: PTI

It looks like all political parties in Tamil Nadu, except the Dravidian majors, disagree with Nobel laureate economist Abhijit Banerjee’s take on freebies for voters.

It was Banerjee who, while speaking at the 20th foundation day of Bandhan Bank, a non-profit-cum-microfinance institution-cum-small finance bank, recently said there is no empirical evidence anywhere in the world to prove that gifts doled out by governments has resulted in making people lazy. “Instead, such government interventions have made people more creative and productive,” said Banerjee.

Tamil Nadu is one state which has had a lot of government intervention over the last 50 years of the Dravidian regime. Starting with providing nutritious meals to school students to providing gold ‘mangalsutra’ for unmarried women and distributing TV sets and even goats to economically weaker sections in rural areas, both the DMK and the AIADMK have earned a reputation for announcing populist schemes when in power.

While giving away freebies has constantly come under criticism from a section of the society, economists like Amartya Sen say that such schemes help the state progress in health and education sectors. On the other hand, economists like Arvind Panagariya, suggest spending on growth-oriented reforms.


Madras High Court judges N Kriubakaran and B Pugalenthi recently observed that the freebie culture has “made people lazy and reduced their spirit to work hard”. At a time when parties like Makkal Needhi Maiam and Naam Tamilar Katchi promise ‘alternative politics’ and oppose doling out freebies for vote, The Federal sought comments from the representatives of these parties on Banerjee’s statement.

‘Intervention should be skill-oriented’

“We too announced free computers with internet connection for every household, but we see it as an investment for the people,” said V Santhosh Babu, general secretary of Makkal Needhi Maiam. The former bureaucrat, who contested from the Velachery constituency, said that populist schemes should be linked with enhancing talent and skills of the people.

“I am also the person who was given the responsibility to distribute one crore colour television sets during DMK patriarch M Karunanidhi’s time. It cost about ₹4,000 crore. Even at that point of time, I felt that such a huge amount can be invested in human resources development. But the government said that it would help the people since they get fringe benefits like news, scientific information, etc. Without objective evidence, we cannot say whether a populist scheme is good or bad. The point is, it is proven, at least anecdotally, that people don’t value things that come for free,” he said, adding, “If the government constantly feeds a section of the society with freebies, their true potential can never be realized.”

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Babu said there are several instances where people rose in life without any help. “The boy from Kerala, who was appointed in IIM, is a good example. If the Kerala government gave him freebies, there is a possibility that he wouldn’t have aspired to reach this height. The government’s intervention should be aimed at helping a person bloom. By spending crores of rupees on buying TV sets and washing machines, basic infrastructure like good roads, electricity, garbage disposal, etc., fall short of budget,” he said.

‘Provide the facilities in nearest’

Naam Tamilar Katchi’s Central Chennai candidate Dr R Karthikeyan said that Dravidian parties claim that welfare schemes upgrade the standard of living of people, but they conveniently hide the corruption that thrives under such egalitarian offerings in the form of ‘commissions’.

“Take for example, one party promises to distribute washing machines. If a machine costs Rs 8,000, the minister and officials responsible for implementing the scheme, approache the company and demand each machine for Rs 6,000, but ask them to bill for ₹8,000 apiece. This cut money goes in their pockets. But whose money is this? It’s the people’s money. How then such schemes turn out to be a welfare scheme?” he asked.

According to Karthikeyan, reducing women’s burden of cooking or washing clothes is not a welfare scheme. Instead, all the basic needs should be met in their locality itself. “Schemes like providing bicycles or bus pass may superficially look like a welfare scheme. Dravidian parties claim that those schemes have paved the way for many girl children and rural children to get educated. I want to ask, why are you building schools so far away? Build a school in every village instead. Make education free and students will take care of bus fares,” added Karthikeyan.

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‘TN balances welfare and infrastructure’

“Terming or seeing these schemes as ‘freebies’ is a wrong perception. They must be called ‘social welfare schemes’,” says Suresh Sambandam, an entrepreneur and founder, Kissflow, a digital workplace platform.

Sambandam, who supports such schemes promoted by Dravidian parties, said that people who come under the ambit of Income Tax are the ones who criticize such populist schemes.

“In rural areas, particularly poor parents, procrastinate over the marriage of their daughters till they get sufficient amount to buy gold for ‘mangalsutra’. Because of that, many women have crossed the suitable age to get married and that resulted in subjecting them to society’s disapproval. But schemes like ‘Thaalikku Thangam’ (gold for mangalsutra) significantly increased the number of young women who got married at the suitable age,” he said.

To be eligible for certain schemes, the government has fixed a minimum level of educational qualification which resulted in increasing the literacy rate of the state on one hand and empowering women on the other, said Sambandam.

“Only if you have experienced the shame of watching television in someone else’s house, you come to realise the importance of having a TV in your home. Free distribution of television sets in the state has rubbed off the information divide,” he added.

One of the major objections put forth by critics of welfare schemes is that providing such easy benefits increases government’s debt and several infrastructure development works get delayed for lack of funds.

Countering this claim, Sambandam says the state has so far been good in balancing budgetary allocations made for welfare schemes and infrastructure projects. “The COVID situation is a shining example. While our government gave several benefits on the health front, the budget allocated to building hospitals remained intact. In contrast, Gujarat promoted growth of industries, helping the state overtake Tamil Nadu in industrial growth. However, Gujarat lags behind Tamil Nadu in health sector. With COVID cases surging, people of Gujarat are finding it difficult to find a hospital bed,” added Sambandam.