Freebies hamper the country’s economic growth : Supreme Court

New Delhi – The Supreme Court has expressed strong displeasure over freebies announced by various States. The SC warned that such policies could adversely affect the country’s economic growth, saying – ‘When many States already have revenue deficits, who else, but the taxpayers will ultimately have to bear the cost of free electricity, cash transfers, and other concessions’.

1. Providing freebies is against fiscal discipline : Hearing the case of Tamil Nadu Power Distribution Corporation versus the Government, Chief Justice Suryakant observed that while it is the duty of the State to assist the needy, providing freebies indiscriminately even to those who are capable is against fiscal discipline. The growing tendency to announce such schemes just before elections is becoming dangerous. All political parties and policymakers should introspect. (Despite knowing everything, those intoxicated with power sacrifice public interest for personal gain. – Editor)

2. Spell out the source of funds for freebies : The Chief Justice asked – ‘Why is at least 25% of the annual revenue not spent on development ?’ The States were also directed to clearly explain, through affidavits, how they intend to raise funds for these freebies.

3. Questions raised over direct cash transfers : The Chief Justice said that States should focus on generating employment. ‘We have reached a stage where we start the day with free food, then offer free bicycles, followed by free electricity, and now direct cash deposits into citizens’ bank accounts’. Most States are already facing revenue deficit; yet, implementing such policies impose additional financial burdens. Consequently, little remains for development and most funds go toward paying officials’ salaries and meeting the liabilities of these freebies.

Editorial Perspective

For political gains, most political parties in our country  announce or implement schemes as inducements to voters. While some people may avail short-term benefits, on a broader scale citizens ultimately suffer. It is shameful if the people fail to recognise this reality.