The big challenge of 'freebies' against the new governments of four states


If there is no limit to political parties' promise of extortion from government exchequer to win, the economic condition of the country is likely to be affected.

- According to economic experts, these states will double down on fulfilling the promises of 'freebies' both BJP and Congress have made to win elections. In these four states, the state government will have to spend an amount ranging from Rs. The budget of most of the states of the country is equal to this amount, so it makes sense that most of the amount allocated in the budget has to be used for these 'freebies'. After that, there will be no money left for development schemes, salaries of employees, development of infrastructure, etc., so the development of these states will be stunted in the cycle of 'freebies'.

The results of the assembly elections of these four states Madhya Pradesh, Rajasthan, Chhattisgarh and Telangana are out. BJP has captured the power in three states namely Madhya Pradesh, Rajasthan, Chhattisgarh while Congress has won clear majority in Telangana. Political analysis of these results is in full swing but the biggest challenge facing the government that will be formed after these results has not been overlooked. The challenge is to fulfill the promises of 'freebies' made during elections.

Political analysts give different reasons for BJP's victory in three states and Congress in Telangana but 'freebies' is the most important factor. Women and youth voters have a large segment in every state. The promises made targeting this section have had a big impact on the elections. For example, in Madhya Pradesh, the Shivraj Singh Chauhan government announced the Ladli Behn Yojana to give cash of Rs 1,000 per month to every woman, which proved to be a game changer.

This is just one example but the promise of 'freebies' in every state has affected the results. In Madhya Pradesh itself, BJP has given promises including gas cylinder for just 450 rupees, free ration to all the poor, edible oil, sugar, dal at concessional rates, free education up to class 12. In Telangana, Congress has given similar promises including free electricity, monthly allowance of Rs 2500 to unemployed youth, cash amount to women every month, gas cylinder for just Rs 500. Similar promises were also made in Rajasthan and Chhattisgarh. The promises of 'freebies' made by political parties in the name of 'guarantees' have had a huge impact on the voters.

Political papers may talk about leadership, organizational strength etc. but in most states, freebies now have the biggest impact on results. After Aam Aadmi Party's Arvind Kejriwal in Delhi showered people with freebies, voters have been voting based on what party is giving away for free. The promises of 'freebies' have had an impact on the election results of states like Punjab, Himachal Pradesh, Karnataka etc.

According to economic experts, these states will double down on fulfilling the promises of 'freebies' both BJP and Congress have made to win elections. Both BJP and Congress made promises of freebies including cash upon coming to power to get the votes of women, youth, farmers, senior citizens, students, unemployed youth etc. Congress has to fulfill these promises in Telangana and BJP in Rajasthan, Chhattisgarh and Madhya Pradesh. Since the Lok Sabha elections are due in five months, if the promises of 'freebies' are not fulfilled, the voters will kill both the BJP and the Congress, so both have no other option.

According to economic experts, the state government will have to spend anywhere from Rs. The budget of most of the states of the country is equal to this amount, so it makes sense that most of the amount allocated in the budget has to be used for these 'freebies'. After that, there will be no money left for development schemes, salaries of employees, development of infrastructure, etc., so the development of these states will be stunted in the cycle of 'freebies'.

After the introduction of GST, the revenue of the states has been limited. Now that states have no source of additional revenue generation, they have to go into debt and cut funding for development projects, including state infrastructure. Most of the states are now deep in debt. In the cycle of 'freebies', new debt will have to be incurred, so the economic condition of the states will gradually deteriorate.

Economists judge the viability of a state based on its debt compared to its GDP i.e. GSDP (Gross State Domestic Product). Ideally, the debt-to-GSDP ratio should be zero. Meaning, the state should not have any debt but it is not possible so experts emphasize that the debt-to-GSDP should not exceed 15 percent maximum. As the International Monetary Fund is a bit liberal, it believes that the debt up to 20 percent can be managed, but according to economic experts, if the debt-to-GSDP is not more than 15 percent, the necessary funds for development will be easily available in the state.

should be maintained.

Most states in India currently have a debt-to-GSDP ratio of more than 20 percent. If we don't talk about other states, if we talk about the results of the four states, the lowest debt-to-GSDP ratio among these four states is 29.4 percent of Telangana, while the remaining three states are above 35 percent. Debt-to-GSDP will cross 40 percent as the new governments will have to scramble to fulfill their promises, so the condition of these states will deteriorate in the future.

According to economic experts, the situation will become even more critical in the future as political parties will leave no limits on their promises to siphon off government exchequer to win. Due to this, the economic condition of that state will not only deteriorate but will affect the economic condition of the entire country. This factor can put brakes on our growth when India is moving towards a strong economy. Before that break, India has to break the 'freebies' by making a law or in some other way.

- The issue of 'freebies' is currently under consideration in the Supreme Court

The issue of 'freebies' given by political parties has been debated for a long time. A petition has also been filed in the Supreme Court to ban political parties promising 'freebies' in the name of guarantees. The issue is under consideration in the Supreme Court but no solution has been reached.

Prime Minister Narendra Modi also expressed his displeasure against the promise of free goods, terming it as 'rev culture'. On the other hand, leaders including Ashok Gehlot, Arvind Kejriwal called them welfare schemes and argued that 'freebies' are the right of the people. BJP was against 'freebies' but all parties make such promises so BJP too has to fall behind them and give promises of freebies or cash.

During the hearing of the petition against making such promises in the Supreme Court, the Supreme Court also expressed displeasure. The Supreme Court said that 'freebies' and social welfare schemes are different. It is necessary to do good to the people but because of that money disappears from the economy. The Supreme Court emphasized on spending government money for the welfare of the people instead of giving anything free to the people.

However, political parties are not interested in stopping promising 'freebies'. This is because voters vote for the lure of free money and stuff, no one votes in the name of social welfare schemes.

- 70 percent of the income of the states will be spent on 'freebies'

The culture of 'freebies' is gradually increasing in India. Due to this, the free benefits given to the people by the states are increasing. In most of the states, these benefits are given to the people through schemes linked to the name of the Prime Minister or the Chief Minister and they are given the common name of Social Welfare Schemes.

According to the data of the well-known rating agency CRISIL, in India Maharashtra, Gujarat, Karnataka, Tamil Nadu, Uttar Pradesh, Telangana, Rajasthan. In the current financial year in West Bengal, Madhya Pradesh, Andhra Pradesh and Kerala, charity of Rs 4 lakh crore has been done in the name of social welfare schemes. These schemes create vote banks so no political party takes the risk of shutting them down. It is predicted that nearly 70 percent of the state budget in India will be spent on these 'freebies' in the future.


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