[Answered] The politics and economies of freebies are deeply flawed, they are a quick passport to fiscal disaster. DO you agree? Give reasons in support of your answer.

Over the years the politics of freebies has become an integral part of the electoral battles in India. Political parties promise to offer free electricity/water supply, monthly allowances, bicycles, laptops etc. in order to secure the vote of the people. However, the freebies announced are not incorporated into the budget proposals and it’s not clear whether they protect underprivileged or not.

The following arguments are made in the support of freebies:

• Welfare: It provides aid to the poor and underprivileged people in fulfilling their basic needs. Also 39(b) calls for resource distribution for achieving common good.
• Election manifesto: It is argued that poll promises are essential for voters to know what the party would do if it comes to power and have the chance to weigh options.
• Rich-poor divide: In India there is a wide inequality between the rich and the poor in terms of income and wealth. According to Oxfam report 2021, the income of 84% of households in the country declined in 2021, but the number of Indian billionaires grew from 102 to 142.
• Social investment: Economists are of the view that as long as any State has the capacity and ability to finance freebies then its fine; if not then freebies are the burden on economy.

How can it lead to fiscal disaster?

• Macroeconomic instability: The politics of freebies distorts expenditure priorities. Because it is concentrated on subsidies which affect fiscal sustainability of states which are already debt-stressed.
• Not sustainable: Providing free power, water and other kinds of consumption goods affects environment and sustainable growth. This affects those agricultural practices also which do not depend on extensive use of water and fertilisers.
• Manufacturing qualities: Freebies lower the quality and competitiveness of the manufacturing sector by distracting from efficient and competitive infrastructure enabling efficiencies.
• Distortion of expenditure priority: It creates intergenerational inequality and also affects the broader principles of equity and morality. The expenditure priorities being distorted away from growth-enhancing items also led to greater social inequalities.

A proverb says, “Give a man a fish and you feed him for a day; teach a man to fish and you feed him for a lifetime.” It is always better to provide useful skills to the people than to give them freebies. But, in basic necessities such as giving free education and meals to younger children are rather positive approaches.