Welfare Is Policy, Timing Is Politics - Why Supreme Court Must Lay Down Guidelines On Direct Cash Benefit Transfers And Freebies

The debate around direct cash benefit transfers and freebies in electoral politics is marked by a curious contradiction. Publicly, there is near-universal agreement that elections should not be influenced by material inducements. In practice, however, pre-election announcements of cash transfers and benefits rarely trigger discomfort- either among political actors or beneficiaries. This dissonance becomes more pronounced as governments increasingly unveil welfare schemes and direct cash transfers just before polls, blurring the line between social policy and political strategy. An observation recently also came from the Chief Justice of India, who reportedly took a dim view of announcement of such schemes near elections.

An election can only be fair if there is a level playing field for all parties, and the ruling party- which controls the exchequer and the administration- does not enjoy an unfair advantage. An election can only be free if a voter is neither coerced, unduly influenced, nor bribed, and is able to exercise the right to vote independently, without fear or favour. Keeping this in mind, Parliament enacted the Representation of the People Act, 1951, which declares bribery a “corrupt practice” under Section 123 on which an election may be challenged.

In this it is important to point out the difference between a government making policy decisions and rolling out welfare measures during its tenure such as subsidised electricity, water, public transport or free health and education as opposed to a government distributing direct cash benefit and freebies to voters on the eve of elections.

Timing of such cash transfers is suspect

This trend of direct cash benefit transfers is increasingly being adopted across party lines, keeping in mind the electoral calendar. Schemes such as the Mukhyamantri Majhi Ladki Bahin Yojana (Maharashtra), Mukhyamantri Ladli Behena Yojana (Madhya Pradesh), Deen Dayal Lado Lakshmi Yojana (Haryana), and Mukhiyamantri Mahila Rozgar Yojana (Bihar) share a common feature. These are all state-funded schemes aimed at targeted beneficiary groups, launched proximate to assembly elections, with transfers made before or during the election period. In most instances, these were followed by electoral outcomes favourable to incumbent governments.

Similarly, the 100% centrally sponsored PM Kisan Samman Nidhi Scheme, which promised Rs. 6,000 annually to 12.5 crore farmers, was launched within weeks of the 2019 general elections, with the first instalment timed days before polling. Needless to say, if governments were acting purely from a welfare perspective, the perceived need for strategic timing would scarcely arise. Regional parties are not far behind. The Mukhyamantri Maiya Samman Yojana, launched ahead of the Jharkhand elections in 2024, was similarly positioned as a welfare measure. More recently, Rs. 5000 has been transferred in accounts of 1.31 crore women in Tamil Nadu under the Kalaignar Magalir Urimai Thittam (Kalaignar Women's Rights Grant Scheme) with three months to go before the State of Tamil Nadu goes to polls. DMK has further promised disbursal of monthly assistance of Rs. 2000 to the beneficiaries once voted back to power.

Election Commission's uneven enforcement

Model Code of Conduct (MCC) issued by ECI bars any party in power from announcing financial grants or schemes once elections are formally announced. However, it becomes operative only upon the announcement of elections and thus has no application if a cash benefit transfer scheme, couched as a welfare measure, is cleverly introduced by the ruling dispensation days before an election notification.

One would think that this loophole coupled with this alarming trend would trigger stronger regulatory scrutiny by Election Commission of India, which has been put in charge of the entire election process under Article 324 of the Constitution for conducting free and fair elections. Yet, at best, the Commission's interventions leave much to be desired. For instance, in Bihar, where beneficiaries were reportedly identified and funds transferred while the MCC was in force, no decisive action was taken by Election Commission. In earlier instances, however, the Commission did intervene. In 2004 in Tamil Nadu, a cash support scheme for farmers was suspended, and in 2011, the distribution of free colour television sets was halted — both during election periods when the MCC was operative. In 2023, permission earlier granted under the Rythu Bandhu Scheme in Telangana was withdrawn for being violative of MCC. Such arbitrary action on part of Election Commission where action is taken against some, while others are allowed to use these cash transfer schemes with impunity even while MCC is in force makes it even more important for the Supreme Court to pass certain guidelines on this issue in order to protect free and fair elections and to ensure level playing field for all political parties and candidates.

The Voter's Perspective

From the perspective of a recipient who is also a voter, a direct cash transfer is not only beneficial but also carries with it hope and expectation that remaining instalments may follow if the same party returns to power. Aimed at influencing voter behaviour and ultimately the electoral outcome, such measures raise legitimate concerns of inducement, thereby upsetting the level playing field and the integrity of free and fair elections — principles without which democracy loses its substantive meaning.

In Bihar, recipient voters were reportedly given Rs. 10,000 each in cash, alongside promises of substantially larger post-election benefits. Some may argue that voters are discerning enough to recognise inducement and vote independently. Yet, where promises of future payments, cash transfers, and freebies converge, it is impossible to ignore the gradual corrosion of constitutional values. The voters are thus not only induced monetarily, but also resultantly discouraged from casting their vote based on any objective criteria such as the work done by the ruling party in its tenure, the background of candidates, their criminal antecedents and other such yardsticks.

Supreme Court – urgent need for guidelines

The Election Commission's failure to uniformly and strictly regulate such practices has resulted in a situation that the playing field tilts heavily in favour of ruling parties controlling state resources. This troubling trend warrants an urgent consideration by the Supreme Court, particularly when a discernible pattern emerges across party lines.

In S. Subramaniam Balaji v. State of Tamil Nadu (2013) the Supreme Court examined the legality of pre-election promises involving distribution of colour-television sets in Tamil Nadu by DMK. While the Court did not find it fit to prohibit pre-election promises made in election manifestos by contesting political parties, it recognised the potential impact of freebies on

electoral fairness and directed the Election Commission of India to frame guidelines governing election manifestos. More importantly, the judgment acknowledged that, “the reality cannot be ruled out that distribution of freebies of any kind, undoubtedly, influences all people. It shakes the root of free and fair elections to a large degree”. Over a decade later, the concerns raised in Balaji appear not only unresolved but magnified, particularly with the advent of large-scale direct cash transfers targeted at specific voter groups timed close to elections.

Supreme Court in various judgments, including the one in the electoral bonds case has consistently underscored the importance of level playing field and free and fair elections holding it to be a component of the Constitution's basic structure. Way back in 1975 in Indira Nehru Gandhi judgment the Supreme Court noted that democracy can indeed function only upon the faith that elections are free and fair and not rigged and manipulated, that they are effective instruments of ascertaining popular will both in reality and form and are not mere rituals calculated to generate illusion of defence to mass opinion. It is exigent, therefore, that the Supreme Court fills this legislative vacuum by framing comprehensive guidelines addressing the pressing issue of the timing of direct cash transfers and freebie schemes by governments both at centre and in states in order to cling to power or promises of such payments in the future in the name of welfare schemes. Such guidelines, without impeding welfare policies, could provide the much-needed protection against strategic deployment of welfare schemes by governments for electoral advantage, which has now become the new currency of elections.

Authors are practicing Advocates-on-Record at the Supreme Court of India. views are personal