The newly elected Punjab government’s announcement of providing up to 300 units of free power to every household has again raised questions—whether freebies are ‘good or bad’ for the economy.
What are freebies?
Freebies can be defined as something without charge or cost. It is a very well-known and widespread practice during election.
Merit good vs public goods
Are freebies and subsidies needed for developing nations like India?
Despite several impacts on the fiscal management of the government, it becomes very important for the developing nation to incentivize such subsidies and freebies because of various reasons:
Obligation on State
Arguments in support of freebies
Arguments in against of freebies; the dangerous nature of freebies
Can the Election Commission regulate freebies?
Culture of freebies is neither sustainable nor beneficial for the society at large. However, certain leverages and economic assistance are always welcomed for the upliftment of the marginalized section of the society and the people living below poverty line. It can be done through the schemes like MANERGA, direct benefit transfers; PDS so on and so forth.
Government should use the money spent on freebies in employment generation and infrastructural development as advised by Madras HC which will lead to fiscal stimulus and capacity building of masses.
Q1) What do you understand by the term ‘freebies’? Discuss the major impact of freebies on the politics and economy.
Q2) India has experienced the politics of freebies for a long time. In this context, discuss the pros and cons of Freebies? Do you think criminalization of politics is one of the outcome of these freebies.
Verifying, please be patient.