We must learn from Lanka's experience and stop doling out freebies to voters
There’s a hard lesson for several Indian States in the unravelling Sri Lanka story. The island nation, mentioned in Indian mythology as “Sone Ki Lanka”, today stands on the brink of an unprecedented economic disaster which has been triggered by its populist but reckless fiscal policies. Its 22 million population, roughly the same as the number of Delhiites, has hit the streets to protest against the inept financial handling by the Gotabaya Rajapaksa Government. The sorry story started back in 2019 when the country’s treasury started experiencing more outflow than inflow on account of various tax cuts and other pecuniary benefits promised by Rajapaksa to Lankan citizens. With the passage of time, things have reached such a pass that people have to cough up astronomical amounts for even essential items such as milk, bread, rice, cooking oil, pulses and fuel. Prices have skyrocketed from Rs 350 late last month to Rs 900 today; rice costs Rs 600 a kg (if one can find it in the first place!). Lanka’s debt is mounting, as are inflation and people’s anger. Juxtaposing the situation with Indian States throws up a startling scenario. Uttar Pradesh, where free laptops and gas were promised as part of election freebies, has a debt of Rs 6 lakh crore, Uttarakhand owes Rs 84,000 crore, West Bengal has a debt of Rs 5 lakh crore while Rajasthan and Andhra Pradesh have run up a debt of Rs 4 lakh crore each.
Punjab, where the AAP had promised free electricity for up to 300 units to every household and Rs 1,000 to every woman every month, is staring at a similar situation. Immediately after being sworn in as the CM, AAP’s Bhagwant Mann met Prime Minister Narendra Modi and asked for a package of Rs 1 lakh crore for the State. Meanwhile, the free power sop has been postponed till June. It’s time all parties who plan to form Governments on the basis of doling out freebies realise that these will directly reflect in the fiscal health of the States. There’s also the very sound basic logic: If you make freebies permanent, nobody will work. Why will people work if they get to eat and drink for free? That’s one of the major reasons that the prices of everything from fuel to vegetables are spiralling up. The need of the hour is not to give away things for free, but to push citizens towards contributing towards the economy. There’s nothing like a free lunch; now, is there?