freebie culture is not a road to prosperity
- In a recent address, PM shared his anguish on freebies culture.
Freebies and their impact
- Freebies are given without having to pay for them, especially as a way of attracting support.
- A report of RBI on states’ finances highlighted condition of states’ finances and enhanced debt stress due to flawed policies.
Factors to consider while devising welfare policies
- Quest for sustainable development
- Growth should be geared towards intergenerational equity and to exponentially increase development.
- Challenges in providing basic facilities
- Government address inequity by ensuring access to a wide range of basic facilities.
- Removing this inequity to access helps boost the productivity of our population.
- Issue of access
- Benefits under various welfare schemes have eliminated upfront cost of access.
- It has led to irreversible empowerment and self-reliance.
- Use of technology in DBT
- Identification of beneficiaries through SECC and prioritisation based on deprivation criteria has enabled government to assist those who need it the most.
- Using shortcut of universal subsidies or freebies often ignore poor and transferring public resources to affluent.
- Expenditure prioritisation
- Expenditure is distorted away from growth-enhancing items, leading to intergenerational inequity.
- Investors look to macro stability in terms of sustainable levels of debt and fiscal deficit.
- Impact on future of manufacturing and employment
- Conisder debilitating effect of freebies on future of manufacturing and employment.
- Freebies lower the quality and competitiveness of the manufacturing sector by detracting from efficient and competitive infrastructure.
- They honda growth and, therefore, gainful employment because there is no substitute for growth if we wish to increase employment.
- The poor state finance position should serve as a timely reminder to those promising fiscally imprudent and unsustainable subsidies.