: Opinion: Freebies are no welfare schemes #IndiaNEWS #News By Dr Oruganty Prasada Rao Over the years, ‘freebies’ have become an integral part of politics for parties to either win elections or

Opinion: Freebies are no welfare schemes #IndiaNEWS #News
By Dr Oruganty Prasada Rao
Over the years, ‘freebies’ have become an integral part of politics for parties to either win elections or stay in power by offering them as ‘bait’ to woo the voters. Political parties vie with each other to provide freebies and add new ones to the list with each election.
These freebies are in the form of free electricity and water; monthly allowance; gadgets like laptops, smartphones, televisions, mixer grinders, pressure cookers, sewing machines and washing machines;sarees;rice; food kits; free internet connection; cycle and scooty; free travel for women in metro and state-run buses; salary to housewife; free gas cylinders; 2-BHK flat; a cow; etc.
State of Affairs
The three parameters relevant for taking a decision on freebies are debt as percentage of gross State domestic product (GSDP), interest payment as percentage of revenue receipts and gross fiscal deficit as percentage of GSDP.
As per the Fiscal Responsibility and Budget Management (FRBM) Act, the debt to GSDP ratio should be 20% for the States. Except for Maharashtra and Odisha, all other States have more than 20%. Punjab is the most debt-laden State with 53. 3%. Seven other States have above 30%. The Fiscal Responsibility Legislation binds the fiscal discipline of all States at 3% of GSDP. It can be seen from table 1 that only Haryana, Jharkhand and Maharashtra are within the limit of 3%. Bihar has the highest value of 11. 3%. (See table 1 for 14 States)
The State governments have announced welfare schemes (freebies) worth more than Rs 1 lakhcrore for 2022-23. See Table 2 for their effect on the economy. According to the Comptroller and Auditor General (CAG), the expenditure on freebies climbed from 11. 2% in 2020-21 to 12. 9% in FY22. Further, the subsidies increased from 7. 8% in 2019-20 to 8. 2% in 2021-22.

Adverse Impacts
Freebies cut into the funds for the development of the State. They make people lazy and irresponsible and increase free cash with them leading to inflation. Freebies are a misuse of taxpayers’ money by politicians for personal gains. Free electricity and water lead to their wastage and limits the growth of these sectors affecting the overall economy due to lack of adequate funds and also degrade the environment.
The freebie culture gives rise to corrupt practices. Involvement of middlemen to get those freebies cannot be avoided. The beneficiaries also do not mind bribing as they get freebies without investment.
The governments, both the States and the Centre, have been providing freebies to farmers in various forms but the production of rice per hectare in India is only 3. 38 tonnes compared to the world average of 4.

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