Recently, Sanjeev Sanyal, a member of the Prime Minister’s Economic Advisory Council (EAC-PM), sounded a cautionary note to state and central governments regarding political freebies versus genuine welfare schemes. While schemes like free buses, free electricity, or generous pensions may appear appealing to citizens, Sanyal warns that the long-term financial burden could be severe if such programs are not implemented carefully.
Freebies vs Welfare
Welfare schemes are targeted, need-based initiatives aimed at improving health, education, and livelihoods for vulnerable populations.
Freebies, on the other hand, are often politically motivated benefits—like free electricity, water, or transport—given broadly to attract votes, regardless of actual need.
Sanyal emphasizes that while welfare is necessary for social development, unchecked freebies can lead to unsustainable public spending.
The Hidden Costs
Straining State Budgets
Generous subsidies require huge allocations from state funds, often diverting money from essential services like healthcare, education, and infrastructure.
Future Generational Burden
Continuous free provisions can lead to higher fiscal deficits, forcing governments to borrow more. This means future taxpayers bear the cost of today’s freebies.
Reduced Efficiency and Incentives
Free services may reduce incentives for private sector participation, innovation, and efficient resource use. For instance, free electricity may lead to overconsumption or wastage.
What Sanyal Advises
Governments should distinguish welfare from vote-driven freebies.
Policies should be sustainable, need-based, and time-bound.
Targeted subsidies can help the needy without burdening the entire population.
Long-term economic planning should prioritize fiscal responsibility and generational equity.
Why This Matters
While freebies can win immediate popularity for politicians, the economic cost of poorly designed subsidies can affect growth, employment, and essential public services in the long run. Citizens may enjoy short-term benefits, but the burden of financing them often falls on future generations.
Final Takeaway
Sanjeev Sanyal’s warning is clear: freebies are attractive but expensive, and governments must balance short-term appeal with long-term fiscal sustainability. Thoughtful, need-based welfare policies are the key to ensuring social support without compromising the nation’s economic health.
Disclaimer:
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