Economics of Freebies and Politics of Generosity

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Economics of Freebies and Politics of Generosity

Tuesday, 02 July 2024 | Prof. Anant Kumar

Economics of Freebies and Politics of Generosity

It is assumed that the State should be generous and benevolent. In recent years, the state and political leaders have become overly generous to retain their vote banks and popularity. The Central and State governments keep announcing various welfare programmes and freebies. However, they fail to understand the need and consequences of such freebies. It is a good step and nothing wrong with being eleemosynary for those in need. However, being generous to those who are well-off and able to earn must be reviewed, as it places an unintended burden on the state exchequer. The states should follow the principle of equity in showering state expenditure.

In recent years, distributing revdis (freebies) in the names of schemes and programmes to gather votes has become a culture among political parties. The political parties and their leader do not understand the consequences on the country's economy and society. They do not understand this culture of freebies is detrimental to the country's development and progress. At times, the lust for power among politicians overrides policymakers' and bureaucrats’ suggestions against such freebies.

It is not new for political parties, politicians, and governments to promise voters free electricity, housing, health services, and other amenities. Nowadays, rations are free for BPL families, but over ninety percent of the village population avails of these benefits, regardless of need. Irrespective of those who need it and those who do not. Health services are free along with Ayushman Bharat coverage. Parents do not need to spend on children’s education due to free books, uniforms, scholarships, mid-day meals, cycles, and more. Additionally, people receive toilets under Swachh Bharat Abhiyan, housing from schemes like PMAY, two hundred units of free or subsidized electricity, cooking gas, and many other subsidized or free services and amenities. Different types of pensions are available for the young, the elderly, and widows. Recently, the Jharkhand government announced pensions for tribal people over age fifty and INR 1000 per month for all women aged twenty-five and above. Farmers are getting INR 6000 per annum in their accounts.

Interestingly, many of these benefits are availed by those who do not need them. Getting a BPL card or other documents to avail of such schemes is not difficult due to institutionalized corruption and nexus between the parties involved. Such schemes and freebies are making a substantial portion of the population non-productive, unemployed, and dependent on the state. It is becoming difficult to find labour for agriculture and other activities because people are receiving more than enough from the state freebies. People, especially the youth, need to be wary of this culture of freebies. It has become a menace, and no political party or leader dares to stop it. Political leaders and policymakers fail to understand that nothing is free. Someone pays for their promises and those who are paying should have their voice. Paying taxes is not a charity, and political leaders should spend taxpayers’ money judiciously in favour of the state and citizens, rather than for political mileage and retaining power. Undoubtedly, such overgenerosity has helped political leaders in retaining power and position. This has become a tool to win elections over time. Policymakers should understand that this has far-reaching negative consequences for the state and its citizens. This showering of wealth and injudicious distribution has led to the unavailability of labour in rural areas. When people’s aspirations are low and most of their needs are met by the state, they are less likely to work. There are examples of economies failure in the long run due to such practices. It is time to revisit these freebie policies and ensure that benefits reach only those who need them.

 Government freebies result in high taxes and low productivity, causing citizen dependency and financial disruption. Continuing the freebie culture will disempower the people and impoverish the state, leading to debt spirals and economic damage. The state should invest in development projects like infrastructure and employment generation, which will provide long-term economic benefits to the state and its citizens, rather than luring people with freebies.

 The author is a Professor at Xavier Institute of Social Service, Ranchi; the views expressed are personal. Email: pandeyanant@hotmail.com. Views are 

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