Former Reserve Bank of India Governor Duvvuri Subbarao has issued a stark warning about the dangerous trend of competitive populism in Indian politics, arguing that while handouts may win elections, they ultimately fail to build nations.
The Bihar Election: A Case Study in Populist Excess
The recent Bihar state elections served as a dramatic example of what Subbarao describes as competitive populism reaching alarming levels. During the intense campaign period, the governing NDA coalition transferred Rs 10,000 to approximately 1.2 crore women across the state.
Not to be outdone, the opposition Mahagathbandhan alliance escalated the promises dramatically. They committed to providing Rs 30,000 to every woman in Bihar while also guaranteeing a government job for every household throughout the state.
The Fiscal Reality Check
Subbarao observed that these extravagant promises created an air of unreality, as if the political establishment had collectively abandoned all principles of fiscal arithmetic. The former RBI governor noted that voters ultimately recognized the limitations of what even the most generous government could realistically deliver.
In the end, the opposition's lavish assurances lacked credibility with the electorate, who appeared to understand that there are practical constraints to government spending and resource allocation.
Call for a National Solution
The seasoned economist proposes a concrete solution to curb this dangerous trend. He advocates for the creation of a national code that would establish clear limits on how much political parties can spend on election freebies and populist measures.
This proposed framework would also compel political parties to demonstrate exactly where the money for their promised largesse would originate, bringing much-needed transparency and fiscal responsibility to election campaigning.
Subbarao's analysis, dated November 27, 2025, comes at a critical juncture in Indian politics as the debate over welfare spending versus sustainable development intensifies across the political spectrum.
