On Tuesday, Delhi CM Rekha Gupta presented her government's first budget. Besides a big step-up in capex, the ₹1 lakh cr state budget delivered on the electoral promises made by BJP in the run-up to the election, which had also turned out to be a slugfest between BJP and AAP over who would offer voters more freebies.
Annual fiscal cost of one of the key populist promises - a payout of ₹2,500 every month to women - is estimated at ₹5,100 cr in the budget. This is over and above existing subsidies rolled out by AAP, including payouts for free power, drinking water and bus travel for women, all of which the new government has retained.
The Delhi government is not alone in monetising its populist electoral promises, often at considerable fiscal cost. Currently, 13 state governments are offering direct cash transfers to indulge a key electoral constituency of women. If anything, BJP has come late to the party. In the 2024 general election, it had passed on doling out freebies, even though it was facing two-term anti-incumbency. Since then, it hasn't looked back, matching AAP stride-for-stride in offering freebies to win Delhi.
Freebies are the effect, not the cause. Addressing spiralling aspirations with limited resources and a broken delivery system is daunting. Worse, unfulfilled aspirations are causing unprecedented anxiety among the electorate, leaving them vulnerable to the growing business of protest politics.
This face-off between aspirational politics, pioneered by BJP, and protest politics, spearheaded by a clutch of opposition parties, including Congress, is coming to a head. Freebies are becoming a means to satiate some of the aspirations and buy incumbent governments crucial time.
Since the turn of this millennium, India has gradually traded up. The first signs were visible in Census 2011. This phenomenon accelerated in the last decade with GoI pursuing provision of basics like electricity, banking, cooking gas, housing and drinking water in mission mode.
By February 2023, GoI succeeded in equipping 117 mn households with toilets, providing 96 mn LPG connections, banking 478 mn people, and providing insurance cover to 446 mn persons under the PM Suraksha Bima Yojana and PM Jeevan Jyoti Bima Yojana. For the first time, social welfare spending was getting bang for the buck. A key reason for this was the rollout of Aadhaar in 2009. The JAM (Jan Dhan accounts, Aadhaar, Mobile) trinity worked like an economic GPS, which enabled GoI to target social welfare spending. Cumulative savings to the exchequer are estimated at a staggering ₹3 lakh cr.
Undoubtedly, improved social welfare spending accelerated the decline in poverty. According to UNDP, poverty declined from 55.1% in 2005-06 to 16.4% in 2019-21.
This bootstrapping of people out of poverty has led to the creation of a 250 mn strong neo-middle class, located in tier-2 and tier-3 cities. These new stakeholders have become the force multiplier of aspirations. In turn, this has led to the evolution of new touchpoints for aspiration. BJP-led NDA has successfully monetised these aspirations to win a record-matching third consecutive term in office.
However, this aspirational story has hit a bump in the last few years. This is because it is not homogenous across a country growing at multiple speeds. A recent Blume Ventures 'Indus Valley Annual Report 2025' classifies India into three categories based on per-capita income: India-1 ($12,000), India-2 ($3,000), and India-3 ($1,500). This stratification frames the new political economy of India, in which the top 20% account for 80% of discretionary spending - manifesting in growing premiumisation of the consumer economy - while the balance holds the key to electoral power.
As aspirations grow, needs are less easily fulfilled, leaving behind an exasperated electorate. This makes it even more difficult for incumbent governments to manage the delicate balance between multiple Indias.
The political space that is being created is being swiftly occupied by political parties and civil society groups, which till now preferred to remain in the background. Unsurprisingly, India has witnessed a spike in public protests, with parties choosing to leverage anxieties. The most prominent instance has been the prolonged stir by farmers, first against the farm laws, and later to demand a law to make MSP permanent.
This bitter contestation is also visible in frequent disruptions in Parliament, challenges to every policy decision and accusations of crony capitalism, a tactic BJP deployed when it was in the Opposition.
The face-off between aspirational politics and anxiety politics has already caused GoI to slow down the rollout of much-needed economic reforms. If not reversed, it could well derail India's audacious ambition to transform into a developed economy by 2047.
The writer is a journalist
Annual fiscal cost of one of the key populist promises - a payout of ₹2,500 every month to women - is estimated at ₹5,100 cr in the budget. This is over and above existing subsidies rolled out by AAP, including payouts for free power, drinking water and bus travel for women, all of which the new government has retained.
The Delhi government is not alone in monetising its populist electoral promises, often at considerable fiscal cost. Currently, 13 state governments are offering direct cash transfers to indulge a key electoral constituency of women. If anything, BJP has come late to the party. In the 2024 general election, it had passed on doling out freebies, even though it was facing two-term anti-incumbency. Since then, it hasn't looked back, matching AAP stride-for-stride in offering freebies to win Delhi.
Freebies are the effect, not the cause. Addressing spiralling aspirations with limited resources and a broken delivery system is daunting. Worse, unfulfilled aspirations are causing unprecedented anxiety among the electorate, leaving them vulnerable to the growing business of protest politics.
This face-off between aspirational politics, pioneered by BJP, and protest politics, spearheaded by a clutch of opposition parties, including Congress, is coming to a head. Freebies are becoming a means to satiate some of the aspirations and buy incumbent governments crucial time.
Since the turn of this millennium, India has gradually traded up. The first signs were visible in Census 2011. This phenomenon accelerated in the last decade with GoI pursuing provision of basics like electricity, banking, cooking gas, housing and drinking water in mission mode.
By February 2023, GoI succeeded in equipping 117 mn households with toilets, providing 96 mn LPG connections, banking 478 mn people, and providing insurance cover to 446 mn persons under the PM Suraksha Bima Yojana and PM Jeevan Jyoti Bima Yojana. For the first time, social welfare spending was getting bang for the buck. A key reason for this was the rollout of Aadhaar in 2009. The JAM (Jan Dhan accounts, Aadhaar, Mobile) trinity worked like an economic GPS, which enabled GoI to target social welfare spending. Cumulative savings to the exchequer are estimated at a staggering ₹3 lakh cr.
Undoubtedly, improved social welfare spending accelerated the decline in poverty. According to UNDP, poverty declined from 55.1% in 2005-06 to 16.4% in 2019-21.
This bootstrapping of people out of poverty has led to the creation of a 250 mn strong neo-middle class, located in tier-2 and tier-3 cities. These new stakeholders have become the force multiplier of aspirations. In turn, this has led to the evolution of new touchpoints for aspiration. BJP-led NDA has successfully monetised these aspirations to win a record-matching third consecutive term in office.
However, this aspirational story has hit a bump in the last few years. This is because it is not homogenous across a country growing at multiple speeds. A recent Blume Ventures 'Indus Valley Annual Report 2025' classifies India into three categories based on per-capita income: India-1 ($12,000), India-2 ($3,000), and India-3 ($1,500). This stratification frames the new political economy of India, in which the top 20% account for 80% of discretionary spending - manifesting in growing premiumisation of the consumer economy - while the balance holds the key to electoral power.
As aspirations grow, needs are less easily fulfilled, leaving behind an exasperated electorate. This makes it even more difficult for incumbent governments to manage the delicate balance between multiple Indias.
The political space that is being created is being swiftly occupied by political parties and civil society groups, which till now preferred to remain in the background. Unsurprisingly, India has witnessed a spike in public protests, with parties choosing to leverage anxieties. The most prominent instance has been the prolonged stir by farmers, first against the farm laws, and later to demand a law to make MSP permanent.
This bitter contestation is also visible in frequent disruptions in Parliament, challenges to every policy decision and accusations of crony capitalism, a tactic BJP deployed when it was in the Opposition.
The face-off between aspirational politics and anxiety politics has already caused GoI to slow down the rollout of much-needed economic reforms. If not reversed, it could well derail India's audacious ambition to transform into a developed economy by 2047.
The writer is a journalist
(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)
Anil Padmanabhan