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Last updated: 23 Aug, 2022  

India.Growth.9.Thmb.jpg Freebies debate

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Bikky Khosla | 23 Aug, 2022

Early this month, the Supreme Court of India recommended to constitute an expert committee to brainstorm on the issue of election ‘freebies’. The committee will comprise representatives of Union and State governments, RBI, Finance Commission, and NITI Aayog, etc. The court noted that a legislation banning freebies is not advisable, but there should a balance between welfare measures and loss to the public exchequer.

The issue has come to the fore recently with a PIL seeking action against political parties for promising or distributing irrational doles during election campaigns. While the Modi government came out in support of the PIL, AAP has moved the SC opposing it, adding that free-water, electricity and transport are essential provisions in an unequal society. The Chief Economic Adviser to the West Bengal government even alleged that the NDA government is the biggest giver of freebies for political leverage.

The term ‘freebies’ usually refers to something doled out to the population that does not support production and productivity in medium to long term. Not all such policy interventions – like free electricity or farm loan waiver – can directly be termed as freebies, considering rising inequality in our country, but some other kinds of expenditure – like on distributing laptops, smartphones, cycles, TV sets and so on – are, no doubt, done with elections in mind and therefore should be restricted.

According to a recent RBI report titled ‘State Finances: A Risk Analysis’, from 2014 onwards –despite more resources given – allocation by Indian states to social sectors and health and education has been declining. Also, overall, India’s welfare spending is very low. On the other hand, the report adds, “expenditure on freebies range from 0.1 - 2.7 percent of GSDP for different states”. This trend needs to stop..

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