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Key Points

States consistently ramp up their spending after elections conclude, according to two decades of data. Revenue expenditure specifically jumps as governments introduce new freebie schemes, particularly targeting women voters. These welfare programs tend to become permanent fixtures that are difficult to roll back later. The pattern shows capital expenditure gets delayed during election years but catches up afterward.

Key Points: States Boost Freebie Spending After Elections 20-Year Data Shows

  • States increase revenue spending by 0.3% of GSDP immediately after elections
  • Capital expenditure rises by 0.2% of GSDP as post-poll catch-up
  • Ten major states introduced new freebie schemes in recent election cycles
  • Welfare programs become difficult to cut once launched despite fiscal pressures
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Last 20 years' data shows states spending increases post elections due to freebies: Report

Analysis reveals states increase revenue expenditure by 0.3% of GSDP post-elections, with freebie schemes becoming permanent fixtures regardless of ruling party.

"The last 20 years have seen states' spending usually picking up post-elections - Emkay Research Report"

New Delhi, September 29

The last two decades have shown that states' spending usually picks up after elections, with revenue expenditure turning out to be the most prominent driver, according to a report by Emkay Research.

The report noted that the last couple of years have been heavy with state elections, as 10 major states went to polls during this time. Almost each of these states introduced new freebie schemes, especially for women, regardless of party lines. Such schemes have proven to be a strong election-winning strategy and have become a common feature across states.

It stated "The last 20 years have seen states' spending usually picking up post-elections.... Almost each of these states introduced new freebie schemes (especially for women), regardless of party lines, as such schemes have proven to be an election-winning strategy"

An analysis in the report of 19 major states over the past 20 years showed that on average, a state's revenue expenditure rises by 0.3 per cent of GSDP in the year immediately after an election.

Capital expenditure also rises by 0.2 per cent of GSDP, though this is largely a catch-up as it tends to fall in the lead-up to polls. The fiscal deficit, however, remains unchanged during this period.

The report said this trend highlights how revenue expenditure, especially in the form of freebies, has a sticky nature. It becomes difficult to cut welfare or freebie programs once they are launched, while spending also increases due to new programs introduced by a fresh ruling dispensation.

Looking at the recent cycle, the report shared that 10 major states went to polls in the last two years, five in FY24 and five in FY25. On average, these states saw fiscal deficit-to-GDP rise by 1 percentage point in the election year compared to the previous year, and then remain flat in the following year.

Revenue expenditure-to-GDP rose by 0.3 percentage point in the election year, with a further increase of 0.6 percentage point in the year after the polls, reinforcing the sticky nature of welfare and freebie spending.

Capital expenditure-to-GDP, on the other hand, stayed flat in the election year but rose by 0.4 percentage point a year later.

States had rationalized capex in election years to prioritize revenue spending, with capex then witnessing a catch-up in the subsequent year, the report said.

- ANI

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Reader Comments

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Priya S
While I understand the concern about fiscal discipline, let's not forget that many of these "freebies" are essential welfare measures for women and marginalized sections. In a country with so much inequality, some redistribution is necessary. The focus should be on better implementation.
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Arjun K
The data speaks for itself - 0.3% increase in revenue expenditure post-elections across 19 states! This pattern is too consistent to ignore. Parties across the spectrum are guilty of this populist spending. We need more informed voters who look beyond short-term benefits.
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Sarah B
As someone who has studied public policy, I find this trend concerning. The "sticky nature" of welfare spending mentioned in the report is real - once schemes are launched, they're politically impossible to withdraw. We need sunset clauses for such programs.
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Kavya N
What about the positive aspect? Women-focused schemes have genuinely helped many families. My mother receives a small pension that helps with household expenses. The problem isn't welfare itself, but the timing and transparency of these announcements. 👍
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Michael C
The capital expenditure pattern is interesting - it drops before elections and catches up later. This shows how infrastructure projects get delayed due to political cycles. We need more consistency in development spending rather than this stop-start approach.
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Aditya G

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.

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