Democracy, Freebies, and Development: The Indian Paradox

Authors

https://doi.org/10.22105/masi.v3i2.105

Abstract

India’s democracy, the largest by voter count, lives with a quiet paradox: GDP grows at 6% a year, yet human development barely stirs. This article traces that gap to three interlocking forces: The contested legitimacy of Electronic Voting Machines, the runaway freebie spiral among state governments, and the murky financing of electoral competition. Using RBI State Finances (2022-2025) reports, the ACM CCS security study by Wolchok et al. [1], PRS Legislative Research, examining the 2024 twin rulings of the Supreme Court on VVPAT verification and on the Electoral Bond Scheme, and datasets on the wealth of ADR candidates, the article illustrates how Indian politics (electoral in particular) invariably exchanges long-run public provision for short-run handouts. These figures paint a grim picture. Expenditure on subsidies in 24 states was Rs 3,18,815 crore in FY2023-24, constituting 9% of total revenue receipts, with Punjab hogging out roads, schools, and hospitals at 21%. Rs 1.35 lakh crore was the estimated cost of conducting the 2024 general election, the highest ever in the world on a per-voter basis, while the Electoral Bond Scheme had funneled in Rs 12,979 crore in anonymous corporate monies before the Supreme Court struck it down in February 2024. India consequently ranks 134th on the Human Development Index (HDI) despite being the fifth-largest economy; only 43% of Class 5 rural children can read a Class 2 text; public health spending at 2.1% of GDP is less than one-quarter of the OECD average. The article closes with a five-pillar reform agenda grounded in comparative democratic experience and India’s own constitutional framework.

Keywords:

Electronic voting machines, Freebie culture, Electoral finance, Black money, Fiscal crowding out, Populist redistribution, Human development, VVPAT, Electoral bonds

References

  1. [1] Wolchok, S., Wustrow, E., Halderman, J. A., Prasad, H. K., Kankipati, A., Sakhamuri, S. K., … & Gonggrijp, R. (2010). Security analysis of india’s electronic voting machines. Proceedings of the 17th ACM conference on computer and communications security (pp. 1–14). New York, NY, USA: Association for Computing Machinery. https://doi.org/10.1145/1866307.1866309
  2. [2] UNDP. (2023). Human development report 2023-24 Breaking the gridlock: Reimagining cooperation in a polarized world. https://hdr.undp.org/content/human-development-report-2023-24
  3. [3] Press Information Bureau Government of India. (2024). Economic survey 2023-24. https://static.pib.gov.in/WriteReadData/specificdocs/documents/2024/jul/doc2024722351601.pdf
  4. [4] ASER Centre. (2022). Annual status of education report 2022. https://asercentre.org/aser-2022/
  5. [5] Khemani, S. (2004). Political cycles in a developing economy: Effect of elections in the Indian States. Journal of development economics, 73(1), 125–154. https://doi.org/10.1016/j.jdeveco.2003.01.002
  6. [6] Narayan, K. (2025). The growing burden of state subsidies. https://www.ideasforindia.in/topics/macroeconomics/the-growing-burden-of-state-subsidies
  7. [7] Kant, R. (2025). Money, muscle and votes: India’s new portfolio politics. https://asiatimes.com/2025/10/money-muscle-and-votes-indias-new-portfolio-politics/
  8. [8] Devi, S. A. A. A. . (2024). A case study on freebies and electoral politics in India: Voter Behavior, economic impact, and global lessons. Policy journal, 15, 23–45. https://doi.org/10.59467/PJ.2024.15.23
  9. [9] Mukhi, S. S., Tiwari, D. B. B., & Ghosh, S. (2024). Promises of prosperity: The burden of freebies on India’s fiscal health. https://doi.org/10.21203/rs.3.rs-5385997/v1
  10. [10] Birch, S. (2011). Electoral malpractice. Oxford University Press. https://doi.org/10.1093/acprof:oso/9780199606160.001.0001
  11. [11] Norris, P. (2014). Why electoral integrity matters. Cambridge University Press. https://www.amazon.com/s?k=9781107052802&i=stripbooks&linkCode=qs
  12. [12] Desai, Z., & Lee, A. (2021). Technology and protest: the political effects of electronic voting in India. Political science research and methods, 9(2), 398–413. https://doi.org/10.1017/psrm.2019.51
  13. [13] Benaloh, J., Jones, D., Lazarus, E. L., Lindeman, M., & Stark, P. B. (2011). {SOBA}: Secrecy-preserving observable ballot-level audit. https://arxiv.org/pdf/1105.5803
  14. [14] Herstatt, M., & Herstatt, C. (2017). india’s electronic voting machines: Social construction of a controversy surrounding a frugal innovation. In Lead market India: Key elements and corporate perspectives for frugal innovations (pp. 195–212). Cham: Springer International Publishing. https://doi.org/10.1007/978-3-319-46392-6_9
  15. [15] Nordhaus, W. D. (1975). The political business cycle. The review of economic studies, 42(2), 169–190. https://doi.org/10.2307/2296528
  16. [16] Rogoff, K. S. (1987). Equilibrium political budget cycles. National Bureau of Economic Research Cambridge, Mass., USA. https://doi.org/10.3386/w2428%0A
  17. [17] Persson, T., & Tabellini, G. (2002). Political economics: Explaining economic policy. MIT press. https://www.amazon.com/s?k=9780262303668&i=stripbooks&linkCode=qs
  18. [18] India, R. B. of. (2024). State finances : A study of budgets. https://www.rbi.org.in/Scripts/AnnualPublications.aspx?head=
  19. [19] Dash, B. B., & Mukherjee, S. (2015). Political competition and human development: Evidence from the Indian States. The journal of development studies, 51(1), 1–14. https://doi.org/10.1080/00220388.2014.947280
  20. [20] Kumar, A. (2024). Freebie debates and budgetary priorities: Economic growth-led India or inclusive India. The international journal of community and social development, 6(1), 97–114. https://doi.org/10.1177/25166026241237325
  21. [21] Stokes, S. C. (2005). Perverse accountability: A formal model of machine politics with evidence from Argentina. American political science review, 99(3), 315–325. https://doi.org/10.1017/S0003055405051683
  22. [22] Nichter, S. (2008). Vote buying or turnout buying? machine politics and the secret ballot. American political science review, 102(1), 19–31. https://doi.org/10.1017/S0003055408080106
  23. [23] Vaishnav, M. (2017). When crime pays: Money and muscle in Indian politics. Yale University Press. https://www.amazon.com/s?k=9780300216202&i=stripbooks&linkCode=qs
  24. [24] Mitra, A., & Mitra, S. (2025). Cash for votes: Evidence from India. Economic development and cultural change, 74(1), 213–239. https://doi.org/10.1086/735574
  25. [25] Goyal, T. (2024). Do citizens enforce accountability for public goods provision? evidence from India’s rural roads program. The journal of politics, 86(1), 97–112. https://doi.org/10.1086/726973
  26. [26] Poola, D., & Anna John, V. (2025). Behind the curtain: unravelling corruption in the electoral bonds scheme. Humanities and social sciences communications, 12(1), 1949. https://doi.org/10.1057/s41599-025-06201-z
  27. [27] Banerjee, A., & Somanathan, R. (2007). The political economy of public goods: Some evidence from India. Journal of development economics, 82(2), 287–314. https://doi.org/10.1016/j.jdeveco.2006.04.005
  28. [28] Keefer, P., & Khemani, S. (2005). Democracy, public expenditures, and the poor: Understanding Political incentives for providing public services. The world bank research observer, 20(1), 1–27. https://doi.org/10.1093/wbro/lki002
  29. [29] Jensenius, F. R., & Chhibber, P. (2023). Privileging one’s own? voting patterns and politicized spending in India. Comparative political studies, 56(4), 503–529. https://doi.org/10.1177/00104140221109430
  30. [30] Heath, O., Tillin, L., Mishra, J., Kumar, S., & Venkateswaran, S. (2025). Poor health: Credit and blame attribution in India’s multi-level democracy. World development, 185, 106807. https://doi.org/10.1016/j.worlddev.2024.106807
  31. [31] PRS Legislative Research. (2023). State of state finances 2023–24. https://prsindia.org/budgets/discussionpapers/state-of-state-finances-2023-24
  32. [32] Bawa, J., Singh, S., & Singh, B. (2024). EVM allegations: Deflecting accountability in Indian politics – analysis. https://www.eurasiareview.com/13122024-evm-allegations-deflecting-accountability-in-indian-politics-analysis/
  33. [33] Ghuman, R. S. (2025). Understanding economic deceleration of Punjab. Economic & amp; political weekly, 60(34), 42647. https://doi.org/10.71279/epw.v60i34.42647
  34. [34] Khemka, A. (2024). Why do voters elect criminal politicians? European journal of political economy, 82, 102527. https://doi.org/10.1016/j.ejpoleco.2024.102527
  35. [35] Muralidharan, K., Niehaus, P., & Sukhtankar, S. (2017). General equilibrium effects of (improving) public employment programs: Experimental evidence from India. https://doi.org/10.3386/w23838%0A

Downloads

Published

2026-06-13

Issue

Vol. 3 No. 2 (2026): Management Analytics and Social Insights (MASI)

Section

Articles

How to Cite

Behera, J. . (2026). Democracy, Freebies, and Development: The Indian Paradox. Management Analytics and Social Insights, 3(2), 110-128. https://doi.org/10.22105/masi.v3i2.105

Similar Articles

21-30 of 37

You may also start an advanced similarity search for this article.