PM Modi's Third Term: Freebies Score Big, Ease of Living Programmes Falter

In its first term, the Narendra Modi government initiated quite a few social welfare programmes aimed at improving ease of living for the poor. Such programmes create assets in the hands of the individuals or households, in turn, helping them improve their standard of living.These programmes included Swachh Bharat Mission to build toilets, Pradhan Mantri Awas Yojana (PMAY) for building houses, Saubhagya Scheme for taking electricity to every home, and Ujjwala Yojana to provide LPG gas connection to households.In the second term (2019-2024), the Jal Jeevan Mission (JJM) to provide piped water connection to every home was the only new easy of living programme.In the first financial year of its third term, the Modi government has not initiated any new programme for improving easy of living. Quite uncharacteristically, two ongoing programmes – PMAY and JJM – are showing considerable fatigue in their implementation.Finance Minister Nirmala Sitharaman announced an ambitious development programme – PM Package for Employment – in the 2024-25 Budget to provide employment, skills, and internship to over 4.1 crore youth over a five-year period. The government has struggled to roll out these programmes.Budget 2025: Don’t Squander the Opportunity, Go Big on DisinvestmentOn the contrary, the Modi government has been scaling up freebies and cash handouts (FCHs). The National Food Security Act (NFSA)-subsidised food programme has been made a completely free-food Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY). Fertilisers are substantially free. Pradhan Mantri Kisan Samman Nidhi (PMKISAN) provides Rs 6,000 cash handout to every farmer family.Has the Modi government’s welfare approach turned on to its head? Is the government embracing the rewadi culture enthusiastically which it had denounced so vociferously? Is the government’s implementation performance flagging badly?After returning to power in May 2024 for a third term, the Modi government increased the target of providing houses under PMAY (Rural) by one crore and PMAY (Urban) by two crore. The target to build 3 crore additional houses is welcome.Implementation progress under the programme has, however, been quite lackadaisical. In the nine months until December 2024, the government could complete only 3.61 lakh houses under PMAY (Rural) against 56.52 lakh and 25.68 lakh houses completed in 2022-23 and 2023-24, respectively. For PMAY (Urban) 2.0, the government website informs that only 6.12 lakh houses have been sanctioned.The JJM programme missed 100 percent connections deadline of 2023-24, leaving 4.75 crore households unconnected. In the first nine months, only 78.8 lakh connections could be provided which is far short of the progress run rate of an average 2-3 crore connections in previous years.Implementation of three employment-linked incentive schemes for encouraging employment of youth, employment in manufacturing firms, and employment in other sectors seems to have got inordinately delayed as the government has not even approved these schemes until now.The fourth scheme – upgradation of 1,000 industrial training institutes (ITIs) – has not gone to the drawing board still. The ambitious fifth scheme of providing 1 crore internships has been turned into a modest pilot scheme to provide 1 lakh internships. No actual internships have not been approved so far.The implementation record of the above cited three big flagship schemes is quite uninspiring.Freebies are consumption goods like food, electricity, and bicycle provided to the people free of charge or at highly subsidised prices. Cash handout schemes transfer cash to the people, usually by deposit in bank accounts, for spending the way the recipients choose to.The FCHs, which can also be called FreeCH, have been criticised by the Modi government vociferously as something which spoil people’s work-ethics and self-esteem. In the first term, the Modi government shunned FCHs completely.About at the end of first term, the government came out with PMKISAN scheme in Interim Budget 2019-20 and saw to it that one instalment for 2018-19 of Rs 2,000 was disbursed to before the elections for the Lok Sabha were announced. PMKISAN scheme has continued unchanged, thereafter, providing Rs 6,000 cash handout per year to, on an average, 10 crore farmers a year.In the second term, in the wake of the COVID-19 pandemic, the Modi government first provided additional 5 kg rice/wheat per person to over 80 crore NFSA beneficiaries, and later, when this additional food grains scheme was withdrawn, converted the NFSA scheme – which charged only Rs 3/2/1 per kg for rice/wheat/coarse grains – into a free-food scheme, making it a complete freebie.The Modi government inherited selling price of Rs 268 per 50 kg bag of urea in 2014 (Rs 242 per 45 kg bag). After almost 11 years, urea fertiliser continues to be sold at Rs 242 per 45 kg per bag. Likewise, DAP prices for farmers remain the same as they were in 2013-14.In the meantime, fertilisers cost went up 4-5 times in some years, making the government subsidise urea by more than 90 percent of the cost in 2022-23.There are many other FCH programmes like LPG cylinders to Ujjwala beneficiaries etc. The Modi government has also latched on to FCH in states beginning with Madhya Pradesh and Rajasthan in November 2023 elections, perfected its adoption in Maharashtra elections, and has become an all-out convert in Delhi elections.Delhi Elections: 5 Reasons Why BJP isn't Declaring a CM CandidateIn the run up to Budget 2025-26, the government has been targeting influential sections of voters with populist schemes.For government employees, a unified pension scheme was announced in August 2024, promising 50 percent of the last salary as guaranteed pension and a Rs 10,000 per month minimum pension to those who take voluntary retirement after a minimum 10 years’ service. The government announced constitution of Eighth Pay Commission on 17 January in the midst of the Delhi elections. There may be more concessions for the middle class in Budget 2025-26.The government seems to have run out of ideas as no more new ease of living schemes have been announced thus far in the first year of its third term – and is unlikely to come up any in Budget 2025.Slow implementation of PMAY and JJM and almost no implementation of the employment schemes is a real drag on the government’s performance this year. The Budget cannot do anything to improve implementation. Only better governance and administration can help in toning up implementation.Scaling up or starting a new freebie or cash-handout scheme is the easiest thing for any government. While the fiscal position of the government does not provide any leeway for yet another such adventure, with the race to the bottom for freebies and cash-handouts unleashed in the country by all political parties, it would not be surprising if some such scheme(s) tumble out of Finance Minister’s digital bahi-khata on 1 February.Decoding Budget 2024 With Subhash Chandra Garg

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PM Modi's Third Term: Freebies Score Big, Ease of Living Programmes Falter

Quite uncharacteristically, two ongoing programmes are showing considerable fatigue in their implementation.

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Topics: Budget welfare schemes Nirmala Sitharaman