Spent Thought: EC on wrong track asking parties to detail fiscal costs of ‘populism’. That’s a matter between voters & governments

Chief election commissioner Rajiv Kumar on Monday likened last-minute fiscal promises of political parties facing elections to a “tadka” of populism. His views must be read in the context of EC’s discussions with political parties on a potential pro forma to quantify fiscal implications of promises. EC said the effort is meant to safeguard voter rights. Safeguarding voter rights is good but EC’s effort to get parties to fill out a pro forma on fiscal implications is misdirected for two reasons.

First, a pro forma will convey little because it will necessarily be based on a set of assumptions. That hardly improves the meaningful information available to voters. Second, the narrative of states running amok on fiscal matters is misconstrued.

India has an elaborate system of checks and balances on state finances. State fiscal responsibility and budget management laws quantify fiscal thresholds that cannot be breached. GOI then enforces it by setting annual borrowing limits. On occasions GOI slashes the debt states can raise. Finally, CAG provides granular details on government accounts to the citizenry.

Take Rajasthan, for example. Its welfare package and debt implications are debated often. CAG’s audit for 2021-22 said that Rajasthan’s debt-GSDP ratio was 37.7%, which was consistent with the FRBM law. However, a greater share of debt receipts is being used towards redeeming old debt, a sign of incipient trouble. Voters do have enough safeguards on fiscal issues and promises and schemes are really a matter between them and the political executive. Information, however, is lacking on political funding. Funding instruments such as electoral bonds allow concealment of the source of funding even though it can influence public policy. This is an area where voters need safeguards, with or without a pro forma.

END OF ARTICLE