AAP has certainly caught the imagination of the popular media, and to a large extent, urban youth. It's image of being an honest party, with the advantage of having a clean slate, definitely is attractive to a number of people who are tired of waiting for India's Big moment.
With this promise of future, people voted for and then welcomed AAP to form the Government in Delhi. The party has not disappointed so far. Within the first few days of its coming into power, the new government introduced new water and electricity subsidies, ironically called reforms by their supporters, that provided free water and cheaper electricity to people with lower consumption of the said utilities.
While the idea to give something free to the deprived does appeal from a humanitarian point of view, there are some important points that AAP need to look into to ensure that its said reforms are indeed progressive and not regressive for the nation.
Firstly, cross-subsidization of a set of consumers by charging a higher price to another set of consumers is not unheard of in the history of economics and business. At the face of it, the new schemes of the new Delhi government appear to be following this principle but there is an important distinction. In case of cross-subsidization, there is an apparently inferior product or service that is offered at throw away prices the losses due to which are more than ably compensated for by those who aspire to purchase a superior product or service at a much higher price. It also puts in place an incentive for consumers of the inferior product or service to aspire for the superior product or service. In the current scheme, there doesn't seem to be any such evidently superior product or service for those paying higher prices. This therefore, contrary to the intended result, compels people to seek lower prices for the said product or service by cheating and other unscrupulous means.
Secondly, every subsidy scheme that is offered must clearly outline the intended results/benefits, a fixed time-frame within which to achieve the results, and a well-defined regular monitoring and periodic review processes. The results of the monitoring and review processes should be shared with the public. This would ensure that subsidy schemes do not become perennial bottomless dumping pits for tax payers' money.
Thirdly, the government of Delhi needs to eliminate corruption in distribution of water and electricity to ensure fairness in implementation of these schemes. Pilferage must be stopped, electricity theft must be eliminated, and tampered meters must be identified and corrected. Without these solid ground-level actions the schemes would remain good only on paper and the existing disenchantment may continue to persist, if not grow even worse.
Fourthly, the government of Delhi must ensure that the benefit of these schemes reaches the intended segments and reaches only them. As has been pointed out earlier by several other journalists, commentators, and politicians alike that a number of poor households in Delhi do not even have a proper DJB connection, let alone functioning meters, and therefore cannot avail of the benefits of the water subsidy being offered by the Delhi government. The intended benefit however accrues to those who have valid connections and meters even if they did not need the subsidy in the first place.
While the above points are important from an operational point of view, the Delhi government also needs to focus on the strategic aspect of these subsidy schemes, namely, the basic rationale on which the nature of the subsidies has been founded. The government needs to clearly define what is meant by high-usage and low-usage. It needs to share the set of criteria and analysis based on which it concluded that the limit of 667 litres of water a day and 400 units of electricity a month represent all and only the deprived sections of the society. Are these limits chosen arbitrarily? How many people actually consume less than this limit? What is their socio-economic profile? What percentage of consumers consumer under this limit? There is no point in announcing a subsidy if the percentage of population that consumes under the said limits is insignificant. The subsidy then only reduces to mere symbolism without any intended social benefits.
Finally, in all this, the Delhi government must ensure self-sufficiency of finances for itself and all its various departments. The government must share its plans on how it intends to fill the revenue deficit, either in the short-term or the long-term, that is caused due to these subsidies. Simply bleeding the State exchequer dry will not only defeat the purpose of a positive change that people of Delhi sought but will also put AAP in the unenviable club of other 'socialist' parties like SP, RJD, TMC etc.
The people of Delhi have high expectations from AAP. It is time for AAP to deliver and distinguish itself.
