At an event on Saturday, Finance Minister Nirmala Sitharaman shed some light on the debate on freebies. Currently, politicians and parties are debating ‘free gifts’ and welfare schemes. He said that the Modi government aims to empower all through saturation of existing welfare schemes as every Indian citizen is entitled to access to basic facilities.
“Every Indian citizen has the right to access basic facilities without anyone’s attention. Our vision is empowerment through saturation of existing schemes rather than entitlements,” the finance minister said, as reported by PTI.
“If you have reached out to all those who are deserving of something then you have achieved saturation,” he added, “In the last 75 years many efforts have been made to improve the lives of the poor. “
Notably, the saturation of the welfare scheme indicates that all eligible beneficiaries will receive the facilities.
according to Finance MinisterThe difference between all the poor hatao (slogans) of the world and now—the approach to development that Prime Minister Narendra Modi employs—even if he brings in schemes that benefit those in need, to saturation. is by principle so that they cover all eligible people.
On Thursday, the FM alleged that Aam Aadmi Party (AAP) convener Arvind Kejriwal has given a distorted twist to the debate. free of cost, He said, “The Delhi Chief Minister has given a distorted twist to the debate on freebies. Health and education were never said to be free. No Indian government has ever denied them. So by classifying education and health as free, Kejriwal is trying to inculcate a sense of anxiety and fear in the minds of the poor,” he said, adding that there should be a genuine debate on the matter.
DMK leader and Tamil Nadu Chief Minister MK Stalin also joined the debate on Saturday and said the government’s expenditure on education and health cannot be considered free.
The freebies versus welfare debate came into the limelight after PM Modi’s ‘revdi’ jibe with Kejriwal promising free electricity and other facilities for women and pensioners in Gujarat and Himachal Pradesh, once elected in an election.
PM Modi had criticized Kejriwal for distributing ‘revdi’ or freebies.
In general terms, free means something is given to someone for free.
The PM said, “This Revdi culture (or culture of freebies) is dangerous for the development of the country. People with Revdi culture will never build new expressways, new airports or defense corridors for you. Together we have to defeat this mentality, Remove Revdi culture from the politics of the country.
The concept of ‘free gift’ has been heavily debated and it comes in the context of a PIL filed before the Supreme Court. Now the question has arisen as to how many free facilities can be allowed and what is their impact on the economy.
Earlier, in its June 2022 bulletin, the RBI had expressed concern over freebies in the backdrop of the Sri Lankan crisis. “New sources of risk have emerged in the form of overdues of rising expenditure on non-merit freebies, expansion of contingent liabilities and ballooning of DISCOMs,” the RBI said.
According to RBI, in the recent period, state governments have started giving a part of their subsidies free of cost. While there is no precise definition of freebies, it is necessary to distinguish them from public/qualified goods, spending on which brings economic benefits, such as the public distribution system, employment guarantee schemes and state support for education and health.
The RBI said, “Provisions for free electricity, free water, free public transport, waiver of pending utility bills and farm loan waivers are often perceived as freebies, potentially undermining the credit culture, leading to private investment.” Distort prices through cross-subsidies that reduce incentives for labor, and discourage labor at the current wage rate leading to a decline in labor force participation.”
The central bank also said, some freebies can benefit the poor if they are properly targeted with minimal leakage, but their benefits should be assessed due to the huge financial costs and inefficiencies they distort prices and resources. due to wrong allocation of Additionally, free electricity and water provisions are known to cause environmental degradation and decrease in water levels.
According to data from the Comptroller and Auditor General of India (CAG), state governments’ expenditure on subsidies grew by 12.9% and 11.2% respectively during the financial years 2020-21 and 2021-22, after contracting in 2019-20.
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