Cash transfers fundamentally alter the relationship between the state and the voter. They create a one-way flow — the government gives, the citizen receives. Gratitude begins to substitute accountability.
After years of delay, Mumbai is finally headed for a municipal election. For nearly half a decade, India’s richest city has been governed not by elected representatives but by administrators appointed by the state government. That democratic vacuum should have triggered a serious conversation on urban governance — how to run a megacity of 12 million people better, safer and more efficiently. Instead, Mumbai’s civic election has become the latest theatre of India’s freebie politics.
Manifestos released ahead of the Brihanmumbai Municipal Corporation polls reveal a competitive rush to outdo rivals on welfare promises. Fifty per cent concession on BEST bus fares for women, Rs 5 lakh interest-free loans for women-run micro enterprises, monthly cash transfers for domestic workers, free electricity up to a threshold, freezes on water tariff hikes, expanded property-tax exemptions — the list is long and growing. Even technology has been pressed into service, with promises of AI tools to track illegal migrants or manage urban services.
The novelty is not welfare per se. Cities have always subsidised transport, health and education. What is new — and worrying — is the normalisation of cash transfers at the level of city government, alongside revenue-eroding promises, with barely any discussion on how they will be financed.
This raises a deeper political question: Are voters now being viewed primarily as beneficiaries rather than citizens with rights?
Cash transfers fundamentally alter the relationship between the state and the voter. They create a one-way flow — the government gives, the citizen receives. Gratitude begins to substitute accountability. When municipal politics moves in this direction, the idea of the city as a collective civic enterprise weakens. Citizens are no longer stakeholders demanding better services; they become recipients waiting for the next payout.
That shift is especially damaging in an urban context. Municipal governments are not welfare departments alone. They are responsible for roads, drainage, flood control, solid waste and traffic management, water supply, public transport, schools, primary health centres. These are capital-intensive public goods requiring steady revenues and long-term planning. Every rupee committed to an open-ended subsidy or cash scheme is a rupee not available for fixing potholes, unclogging drains or modernising bus depots.
Supporters argue cash transfers empower women and provide relief in difficult times. The evidence does show that targeted transfers can improve welfare outcomes and women’s bargaining power. But two questions cannot be brushed aside. The first is credibility. Manifestos are not budgets. Municipal corporations cannot print money. Unlike state governments, they have limited borrowing capacity and depend heavily on property taxes, user charges and transfers. Promising fare concessions, tax exemptions and cash payouts simultaneously — without naming funding sources — is a fiscal sleight of hand. It is also a wrong priority given the existing state-level scheme.
The second is trajectory. The Economic Survey of 2017 floated the idea of a Universal Basic Income as a conceptual reform — a replacement for inefficient and fragmented subsidies. What we are seeing now is something very different: A slow, competitive drift towards quasi-UBI through election-driven cash promises, layered on top of existing subsidies, with no consolidation or exit strategy.
Once universalised, such schemes stop differentiating parties. At that point, either payouts must keep rising to retain political impact, or politics must return to governance and delivery. Experience suggests the former is easier, but fiscally reckless. Municipal finances are fragile. When revenues inevitably fall short, cities do not cut headline schemes. They cut maintenance, staffing and long-term investment. Roads crumble and drains clog before cash stops flowing.
The tragedy is that Mumbai does not lack alternatives. A serious civic debate would have focused on jobs and livelihoods. Instead, competitive welfarism has crowded out imagination. When elections become auctions of benefits, democracy shifts from deliberation to distribution. Voters are no longer asked what kind of city they want — only what they will receive. That may win elections. It will not fix Mumbai.
This article was originally published in The Indian Express.