Election Freebies in India: A Costly Gamble for States?

Tue Nov 18 2025 06:52:25 GMT+0200 (Eastern European Standard Time)

As Indian states embrace populist handouts to win elections, experts warn that such fiscal strategies may lead to unsustainable financial burdens.

In the realm of Indian politics, election campaigns are increasingly reliant on 'freebies' to attract voters, particularly women. While cash transfers and various handouts have proved effective in swaying public opinion and leading to electoral victories, states are facing backlash over whether these strategies are economically viable. Bihar's recent election results, where a cash incentive contributed to high voter turnout, underscore this trend. However, analysts caution about the long-term fiscal implications as states grapple with significant deficits amidst promises of continued electoral giveaways.

Freebies are powering election victories in India, but can its states afford them? Over the years, handouts have taken different forms in the hotly contested political landscape of the world's largest democracy. Voters have been lured with everything from television sets to bicycles and sometimes even gold ornaments - blurring the fine line between welfare economics and pre-poll populism.

In recent years, cash transfers, especially directed towards women, have become a popular election-winning strategy for political parties of all stripes.

A sweeping victory last week in the eastern state of Bihar - India's poorest state - for an alliance led by Prime Minister Narendra Modi is being credited in part to a 10,000 rupee ($112; £85.18) cash handout to the state's women. A record number of women turned out to vote in the election.

Similar women-oriented financial support schemes were launched by Modi's party in other states like Maharashtra ahead of polls last year. Opposition parties have also promised similar schemes in some states ahead of elections.

Economists have argued in favour of such giveaways. They say that while distinguishing between useful and wasteful handouts is important, it is only by extracting promises during elections that the poor in India get anything at all from their political representatives.

On the other hand, despite his party's own track record on the issue, Modi has in the past warned of the dangers of revdi culture - likening election giveaways to the frivolous distribution of sweets. India's top court had also sought to curb the distribution of such irrational freebies during elections back in 2023.

While there is broad agreement on the need for targeted subsidies to challenge the use of handouts as electoral bait, Indian elections are increasingly dominated by unaffordable, poll-driven freebie economics that states can ill afford.

In Bihar, facing considerable fiscal pressure with a deficit at 6% of its GDP, pre-election schemes have been announced amounting to 4% of GDP. Such actions reflect a growing trend across various states, leading to warnings from analysts about the implications of freebie-driven election strategies.

Despite cautionary advice, the trend of offering handouts appears unlikely to diminish, especially with upcoming elections in key states like Tamil Nadu and West Bengal.