 Hello, welcome to NewsClick. Recently, there has been a lot of discussion and debate around the so-called freebie culture. Delhi BJP leader Ashwini Upadhyay has filed a PIL with the Supreme Court stating that political parties are giving a lot of promises in the name of freebies during elections and those are having a huge burden on the state ex-checkers. To discuss on this matter, we have with us Professor Venkatesh Atreya. Hello sir, thanks a lot for joining us. So what is a freebie and what is the so-called freebie culture? And do you think the word is loaded and is it misleading? Yeah, I am glad you used the word so-called. I want to start this discussion by putting down a few basic propositions. First, in the societies that we live in, in all human societies, basically, you know, you have nature's resources, right? On top of that, you apply human labour. Sometimes, you know, early stages without instruments, later you become sophisticated, you develop tools, that's a man of the toolmaking animal as Benjamin Franklin once said, then you have advanced science and technology, more equipments. But at the end of the day, all production is due basically to two factors, nature and labour. So in a society where the wealth of society every year is being produced by the working people who also end up paying taxes for all the things they buy, GST and all that, you are never asking the question, what is the contribution these working people are making to society's production? What are they getting back? My simple argument is that working people, as opposed to what the PM and the FM have been saying, it is the working people who produce the wealth of the nation through their labour, using available science and technology instruments and all of that, fine. And these include people right up to the top management level who are involved in work in some fashion, you know. Now, they get a portion of it back as wages or salaries or self-employed incomes like farmers or artisans. A large part of it is surplus. And this goes to those who own the factories and the farms and the big means of production. Now, what are we doing in this society? We tax the guys who produce the wealth, that is the ordinary people, working people, and we subsidize, offer tax concessions constantly to those who live off the surplus of the rest of the population. We also claim to be, you know, taking society to newer heights and more growth and all that. So, this whole irony is that the question of freebies should be directed to the corporate sector, not at the working people. So, the complete inversion of the whole dynamic that we are seeing. So, that is the first point I want to make. Secondly, you know, when you, let us say, for example, provide laptops for plus two students or bicycles for girls students to go to school, what are you doing? Is there a freebie? Is there a waste? Is it a revenue expenditure? It may get classified as revenue expenditure at the budgetary documents, but it is an investment in human beings, right? In a very inverted way that capitalism looks at everything. All human creations are looked at as manifestations of the machine. So, we become human capital. This is an absurd term. We create the means of production, we create the new science and new technology and we get called one more form of capital. I mean, this complete inversion again is something you have to constantly be alert to, you know, in every facet of life, what Marx would have called contradiction. Every facet of life, you find this constant, you know, inversion of the active element in production, which is labour. Working people produce wealth, including, you know, intellectuals and manual workers, mental workers, all of that. You know, all working people, no matter what the qualifications or skills are, they are producing every year some output. A part of it goes back to them as wages, salaries, maybe sometimes even share options possibly, but they on top of that in, take India for example, if you take the tax revenues of the union government plus all the state governments, 65 to 67 percent of that, two-thirds roughly of that comes from what are called indirect taxes. That is taxes which are paid on goods purchase, services purchased. These fall at the same rate on the richest and the poorest person. When I buy an item, I pay the same rate of tax as a Nambani does or as a poor man on the street does. So, it is fundamentally iniquitous. It is fundamentally a very regressive kind of tax. These whole indirect tax, tax on commodities. Now, you hiked it so much, especially in the last eight years in this regime, the constant raising of the excess duties on petrol and petrol products and so on. And in other ways, also through a very badly designed and crudely implemented GST, which is getting worse by the day, you have imposed a huge fine on working people who produce the wealth, do not get it, get only a share of it and then they pay taxes on what is in their hands. Now, you turn to them and say, education subsidy, that is a freebie or transport. Women traveling in city buses get to travel, they are paying tickets. That is a freebie. This is the problem. Supreme Court judges should not be talking about these things. They throw them in the domain of competence at all. But these days, if you are a judge, you can speak on anything under the sun. Likewise, you are a political figure and so on. But strictly speaking, you could look at every one of these as investments in raising the capability of human beings in the population. Now, take something which is, which seems a bit more complicated, television. Why would, why did the DMK give television, free television in 2006? Well, you know, it was part of the election promise, but that apart. And then of course, some of the DMK big beings were running a television studio, they had interest in television sector. All that is there. But I was educated in this regard by people. I went to a couple of villages studying this phenomenon. They said, sir, for the first time, we are watching news in our lives. These are people from the villages who had never been having access to visual news, radio news, they may be here occasionally, but visual news makes such a huge impact on them. Good or bad, you can discuss, but for the first time, they had access to the visual medium and they could watch the news on that. Now, to the typical urban middle-class area, why are we wasting money on televisions for the rural masses? This is a way of, you know, diverting them. Very easy to talk. But for them, for those households, it made a difference. First of all, it meant that the children didn't go and sit in somebody else's house. Young girls, 17, 18, did not go to somebody else's house to watch television. They were in their own houses. They could watch TV. The fact that the TV didn't last forever is a different thing. And they would have had to buy the next round of, you know, television. Sir, just like Mr. Modi promises you a gas tower, but doesn't give you any gas cylinder or hikes it to 1000 rupees a cylinder. So, you know, rulers can do all sorts of tricks. At the end of the day, one must think twice before dismissing something as, you know, uneconomic or irrelevant or unnecessary. What constitutes necessity? What constitutes appropriate expenditure? Take, for example, the other side of so-called freebies which go to the poor. In 2019, and I've done this interview for you, much earlier also on this. In 2019, when the economy was in doldrums and the businessmen were saying they can't sell cars, two-wheelers, they can't sell biscuits, Nirmala Sitaraman offered them a massive tax compensation from 30% to 22%. And she herself said in that statement that this would cost the ex-sector 1.45 lakh crore rupees in a year. Nobody called it a freebie. It was supposed to be an incentive, right, to get the economy out of doldrums. Now, what was the narrative there? Was there any guarantee that this would lead to investment and growth? Has it led? No. So, there is a whole narrative being spun, being constructed to say that whenever you provide tax compensation to the corporate sector, that is good for the economy, good for growth. And ultimately, it will come back to people as more output, more jobs, more incomes, simply not validated throughout the world. International experience is a neoliberal capitalism. The last 30 years tells you all such concessions end up swelling the pockets of the big companies, but do very little for the ordinary people. So, wealth inequalities, income inequalities are increasing. Take this regime of eight years. They cancelled the wealth tax, they abolished it. That is what Arun Jaitley did in 2017, his last parting gift to the country. Then, he had actually said that companies with an annual turnover exceeding some amount, alone had to pay, you know, 30 percent, others would pay less and so on. Namaste everyone said everybody is entitled to lower tax rate now. This is before the concession itself. The concession will come a little later, but it has been one round after another of concessions to the corporate sector and also to high net worth individuals in personal income tax, exemptions of various kinds. And apart from taxation, you also know that this government in recent years has actually allowed the corporates not to have to pay back the loans. They have written off loans to about, to extend about 10.25 lakh crores is what I am told. The numbers keep varying, but certainly a very significant sum of money owed by large corporate entities to banks, both private sector banks, but also much more publicly owned banks has been written off. Now, is that a freebie or is that an incentive? Is that something to put the economy on track? Now, where do we think that if GDP growth rate is reported, but people are starving, it is fine. And this is the whole understanding. It is not just about moral questions who deserve it and so on, but simple fact that working people produce the wealth and pay taxes on it whereas the major taxpayer as a quoted and suited person is so deeply you know entrenched in the minds of people because of the television as a medium. You watch any channel and you know this very neatly dressed fellow is the high levels complaining about taxes, but they pay very little taxes compared to the share of the incomes that accrued to them in the country and the wealth that they own now, they don't pay wealth tax. There is no estate duty, there is no inheritance tax. Extraordinary country which is so little taxation on the wealth to do and so much on the poor. So that is my take. So then if you go into the question of freebies and you hold this course this is just wrong. And I saw that please that statement by Ashma Goyal two days ago in the Hindu single freebies of a cost, but don't concessions to corporate sector have a cost? Have you done a single white paper all your life in the academic world or in the government on what has been the claimed benefits of tax concessions for the economy? What have been the actual benefits? What have been the actual costs of those concessions? No, no state government, no Indian government has given a white paper on claims about costs and benefits of tax concessions or you have these global investors conferences, big gala events and so on, a lot of media space and of course ads and all that. So, but at the end of the day first of all how much of the promised investment comes in? Secondly, even if it does come in how much employment does it create? How much output increase does it contribute to? And what of that comes as income to the domestic population which is had to bear free power for these guys, free land given to them? Take Tamil Nadu, you know invited MNCs over the years and because now there is all this talk about the Dravidian model and so on. Well, when the Dravidian parties have been in power they have been very kind to the corporate sector. They were being part of the Dravidian model that is for them to say. But you have huge concessions given to Nokia or to other people who just pack up and go and they are not obliged to worry about employment of the workers, Ford packs up and goes. Any any questions asked? Foxconn, I can add the list, you see. So, when you are inviting global capital or Indian big capital, what do you promise them? You promise them the freedom that they can move out anytime they want, they can take the currency anywhere in the world, they do not have to pay. If they do not pay taxes, we would not ask too many questions, you know. And you can, okay, if you can pay a little symbols, we will be happy but if you do not alright, we will assure you power, we will assure you water, we will assure you land and we will assure you a docile workforce. We will have a labour law reform which makes the working day 12 hours. So, whatever that is a freebie to the corporate sector, making workers work for 12 hours, forcing down wages, these are all freebies to the corporate sector. Why does not the media talk about these freebies? Thank you, sir. Thanks a lot for joining us and giving us such detailed inputs on this discussion. Thank you. Thanks.