Why The Elite Hate Freebies

Every election season in India revives a familiar chorus. Why freebies? Why make people lazy? Don’t give fish, teach people to fish. I pay taxes, why is my money being wasted? These refrains carry the ring of common sense. But the trouble with common sense is that it often serves the interests of the comfortable while sounding like it speaks for everyone. This article is not a rebuttal aimed at the people who repeat these lines. Most do so in good faith, shaped by the sheer size and segregation of Indian life, where you can live an entire existence without encountering the material conditions of someone two districts away. The argument here is with the architects of these narratives, and with the assumptions buried inside them.

The Country We Actually Live In

Start with two numbers from the same year, 2019–20. India’s per capita income, total national income divided across the entire population, was about Rs 1.35 lakh. And a monthly salary of Rs 25,000 was enough to place you in the top 10 per cent of all wage earners. One number tells you how little the country produces per head. The other, which comes from the State of Inequality in India report, released by the Economic Advisory Council to the Prime Minister in 2022, tells you how few people earn even a modest wage. Together, they describe a country where the floor is very low and the ceiling that qualifies as privileged is not much higher.

India’s social order is not merely economic. It is stratified by caste in ways that Ambedkar described with surgical precision: there is no such thing as a caste, only castes, a graded hierarchy where each rung presses down on the one below it.

Data from the India Human Development Survey confirms that when you arrange Indian households by class, caste maps onto class with disturbing fidelity: upper castes at the top, followed by backward castes, Scheduled Castes, and Scheduled Tribes. Caste does not merely correlate with class in India. It precedes and dictates it. This matters because the people at the receiving end of welfare are not there by accident or laziness. They are there because India’s social structure of accumulation i.e., of dignity, wealth, and opportunity, have been shaped across centuries to produce exactly this outcome. And yet the term “middle class” has been quietly appropriated by households firmly in the upper reaches of the income distribution, allowing them to narrate their own comfort as struggle and to cast the welfare needs of the genuinely poor as freebies.

What the “Freebie” Debate Gets Wrong

When a state government announces free rice, a gas connection, or a television set, the criticism follows a predictable script. Why not invest in infrastructure? Why create dependence? These objections dissolve against the evidence. Television sets distributed to poor households are associated with reduced tolerance for domestic violence; exposure to different ways of life shifts norms in measurable ways. Household appliances like mixers and refrigerators are not luxury items for women in low-income families. They mitigate time poverty, freeing hours of drudgery and creating the possibility of workforce participation. What looks like a freebie from the outside often looks like infrastructure from the inside of a home where a woman has never had a spare hour. And laziness? The evidence runs the other way. As welfare interventions improve disposable income, poor households invest in better nutrition, in children’s schooling, in small productive assets. They are not retreating from work. They are trying to climb out of precarity. In the absence of adequate state provision, Indians have, in fact, built their own safety nets. Scholars have documented webs of informal mutual aid, chit funds, family contributions, reciprocal favours across class lines that keep hundreds of millions afloat. This solidarity is remarkable. But it should not have to do the work of a functioning state.

Whose Taxes, Whose Freebies?

The most powerful card in the anti-welfare argument is the taxpayer card. This deserves a serious answer because the picture it paints is almost entirely backwards. For the first time in India’s history, personal income tax collections surpassed corporate income tax, Rs 10.45 lakh crore against Rs 9.11 lakh crore, in 2023-24. But over 90 per cent of individual returns are filed by salaried, middle-income earners whose taxes are deducted at source. Meanwhile, corporate rates have been slashed from 30 to 22 per cent, and collections as a share of GDP have fallen from 3.5 to 2.8 per cent. At the very top, individuals earning over Rs 100 crore saw their share of personal income tax drop from 1.64 to 0.77 per cent. India’s tax base is now narrow at the top and deep in the middle. Then there is the tax nobody calls a tax. GST, levied uniformly on consumption regardless of income, has nearly doubled in five years. Consumption taxes are regressive by nature: they take a larger share of income from those who earn less because the poor spend nearly everything they earn. Only about three per cent of Indians earn enough to qualify for income tax. The state collects from everyone but provides meaningfully for very few.

And what it does provide, it often provides badly, and not always for the reasons people assume. Consider where the big money actually goes. Corporate debt waivers and loan write-offs extended to large conglomerates routinely dwarf the total outlay on welfare schemes. Banks have written off lakhs of crores in bad loans to firms whose promoters remain comfortably wealthy. The argument is not to demonise business; entrepreneurial energy is real and valuable. But if the “animal spirit” of enterprise deserves respect, why tame it with bailouts? And if productive use of public money is the goal, debt relief for firms that have failed is worth questioning with at least as much vigour as a gas cylinder subsidy for a poor household.

Debt and Democracy

The anxiety about state debt rests on a fundamental confusion: equating public debt with household debt. A sovereign state borrowing within an institutional framework designed for that purpose is doing something categorically different from a family overspending. India has a restrictive fiscal responsibility framework. States cannot borrow beyond prescribed limits. Welfare announcements are made within constraints of feasibility, not in a fiscal vacuum. To treat every welfare scheme as a reckless credit card bill is an inconsistent analogy dressed up as an argument.

The deeper question is not whether India can afford welfare but what happens without it. When public investment remains low and the state falls short of being a developmental state, welfare becomes the floor below which citizens must not fall. The caution against building a purely “compensatory state” that substitutes transfers for transformation is well taken. But the answer is not to withdraw welfare in the hope that development follows. It is to build the developmental state while keeping welfare as a foundation, not a ceiling.

India’s election spending, adjusted for purchasing power, now rivals the United States on a per-voter basis. Those who occupy power are overwhelmingly wealthy. In this context, when poor voters bargain hard for welfare promises, they are not being bribed. They are exercising the only leverage democracy gives them. The shift from rights-based frameworks like MNREGA to availability-based alternatives like VB–G Ram G is not merely administrative; it is a philosophical retreat from the idea that citizens are entitled to a floor of economic security.

A vibrant democracy rests on recognition of grievances, redistribution of resources, and representation in power. Welfare is not a deviation from this vision but a precondition for it. A family that cannot feed itself cannot participate meaningfully in public life. A marginalised household locked out of wealth accumulation for generations cannot simply “catch fish” when the pond was never theirs to begin with. If you want better roads, ask why corporate tax rates were cut. If you want less public debt, ask why large firms receive bailouts. If you want a productive citizenry, ask why the state delivers so little. Don’t fight downwards. Build horizontal solidarities and fight upwards, for a democracy that distributes not just votes but dignity.

(Views expressed are personal)

Vignesh Karthik KR is a Postdoctoral Research Affiliate in Indian and Indonesian politics at the Royal Netherlands Institute of Southeast Asian and Caribbean Studies and holds a PhD in Political Science and Public Policy from King’s College London