We live in the age of spin.

Given this, it is hardly surprising that the Aam Aadmi Party’s victory in the Delhi state election has been spun into a victory of freebies. Freebies work, but Arvind Kejriwal wasn’t the first person to figure this out.

The Roman poet Juvenal, who lived in the late first and early second century AD, spoke about “breads and circuses”, or the superficial appeasement of voters that the politicians indulge in.

Let’s take a look at examples that are closer to home and come from the recent past.

The PM-Kisan Scheme, which pays Rs 6,000 per year to all farmer families across the country in three equal installments of Rs 2,000 each every four months, was launched by the current central government led by Prime Minister Narendra Modi. The allocation to the scheme in the 2020-21 budget stands at Rs 75,000 crore.

This is also a freebie.

Over the last few years, waiving off farm loans has become a necessary condition for any and every party looking to do well in the state Assembly elections. As the Reserve Bank of India report, State Finances: A Study of Budgets of 2019-20, points out: “Since 2014-15, 10 states have announced loan waiver programmes of an aggregate amount of Rs 2.3 lakh crore (1.4 percent of GDP), significantly higher than the previous two nation-wide debt waiver programmes — Rs 10,000 crore in 1990 and Rs 52,500 crore in 2007-08.” The first nationwide farm loan waiver was announced in 1989 by the then deputy prime minister, Devi Lal, who was himself a large farmer. It was done through the Agricultural and Rural Debt Relief Scheme, 1990. The loan waiver of Rs 10,000 crore would amount to Rs 50,600 crore, as per 2016-17 price levels. The farm loan waiver in 2007-2008 was announced by the first United Progressive Alliance government. This waiver in 2016-17 price levels would amount to Rs 81,200 crore.

It needs to be pointed out here that while states have announced waivers worth Rs 2,31,260 crore — to be very precise — they haven’t been able to implement these waivers totally.

Between 2014-2015 and 2019-2020, loans worth Rs 1,54,418 crore are expected to be waived off (I say expected, because the 2019-20 numbers are estimates). What this tells us is that while it is easy to announce a farm loan waiver, it is difficult to totally implement it, given that the budgets of most states are already very stretched. So, getting back to Arvind Kejriwal and his freebies.

Delhi is an urban state and to that extent, Kejriwal couldn’t have announced farm loan waivers. So, the freebies that Kejriwal announced are actually his farm loan waiver. The point is that almost every politician in India offers freebies to continue to stay relevant. To that extent, Kejriwal is no different. But as the famous line from the 1975 movie Deewar goes, “Doosron ke paap ginane se khud apne paap kam nahi ho jaate.” Counting the sins of others does not reduce one's own sins.

It is important to look at the finances of the government of Delhi. Let’s first take a look at the fiscal deficits of various state governments in Figure 1. Fiscal deficit is the difference between what a government earns and what it spends.