The recently concluded karnataka election saw congress winning a landslide victory. One of the key factors for this victory was their five guarantee schemes which they promised in their manifesto if they came to power.
So , what are these five guarantee schemes ?
Gruha Jyoti: 200 units of electricity free to all households
Gruha Laxmi: Rs 2,000 every month to each and every women head of the family
Anna Bhagya: 10 kgs of free food grains (rice, ragi, jowar) of their choice to every person in the BPL family
Yuvanidhi: Rs 3,000 per month for two years for unemployed graduates and Rs 15,000 per month for two years for unemployed diploma holders
Shakti: Free travel to all women throughout the state in regular KSRCTC/BMC buses
These five guarantees might look fascinating and obviously who doesn’t want to get the free stuff ?These guarantees attracted a large bunch of rural voters in the state and hence the voters choosed this path ?
But are these freebies really that important , do they really uplift the people ? are they really that beneficial as these politicians claim ?
First , let’s begin with what exactly is a freebie ?
Anything that government provides , without the transaction of money is called a freebie. It means government is willing to give you stuff without you actually paying for it. It can be in terms of goods or services.
Over the years these freebies have become an integral part of Indian Politics. Be it for making promises in the electoral battle or providing free facility to remain in power. Every political party in one or the other way uses freebies to attract voters.
Well are they really free ?
The simple answer is NO they aren’t , There is someone paying for it. Namely a taxpayer . A taxpayer is someone who pays some amount of their money to the government , Surprisingly only 5 percent of Indian population pays tax. So in a country where tax payers are way to less , does giving free stuff makes any sense ?
If there is something free , everybody need to pay for it right ?
Yes , we too agree on the fact that India is a country with huge economic disparity , there are lots of people in the country who are below the poverty line and it is our social responsibility to get them out of it. But does giving free stuff improve there lives ? is it not a better way to give them a job so that they can earn themselves . The free stuff makes man lazy and if he gets more free stuff then there would be a huge economic downfall in the country.
Take the example of Srilanka , The Government in the country cut taxes and provided some free jobs and services , what was the result ? The economy collapsed and state fell under one of it’s worst economic conditions . Infact ,worst in it’s History. As it is said :
“You can teach a man , how to fish even you can give him a fishing rod , but unless he wants to fish there is no use”
Apart from it , The Freebies also put a strain on country’s finances and are determental to economic growth. Freebies undercut the basic framework of macroeconomic stability, the politics of freebies distorts expenditure priorities and outlays remain concentrated on subsidies of one kind or the other. The money could be use for other productive things such as Industrial and Infrastructral development In turn these would create lot’s of job opportunities and the economy could be stable.
Well The Home Minister of Karnataka , Mr D K Shivkumar has openly stated that there would be no development in the state this year as the government is deciding to Utilise more funds for the five guarantee schemes .
The Fiscal Deficit is government purchasing to government spending power.
Offering freebies, ultimately, has an impact on the public exchequer and most of the states of India do not have a robust financial health and often have very limited resources in terms of revenue. If states keep spending money for supposed political gains, their finances will go awry and fiscal profligacy would prevail. As per the Fiscal Responsibility and Budget Management (FRBM) rules the states can’t borrow beyond their limits and any deviation has to be approved by the Centre and central bank. Therefore, while states have flexibility on how they choose to spend their money, they cannot in ordinary conditions exceed their deficit ceilings.
But are all the freebies worst ?
Free Education and Free Health Schemes are essential . These type of schemes actually help in the progress. Infact in the west they don’t call these as freebies there is a special term for it “Social Securities” .
In Europe , Some Countries provide free education even for International Students , These are one of the most developed countries in the world . So they are not falling under any economic collapse . If they can do it , then why don’t we . Infact our country needs it. Right ? But here the case is different in the west the amount of tax payers are high and the government can afford these schemes. From where can we generate that huge amount of money for , so that each one of us did not have to pay for our degrees.
But still it is the need of an hour and government has to bring out these schemes for the people . Infact Education and Health should not be considered as freebies. The government should also take the initiative of opening centres dedicated for skill development. This type of centres can actually make tax payers money more productive.
At last , I would say there is a need for us to differentiate between a good freebie and bad freebie. A Good freebie could be a good investment for the future. But stuffs like Free Laptops , Free Pressure Cookers , Free Gold ( YES !! Some politicians have even promised this ) , Free Sarees or even Free Scooters does not make any sense.
THANK YOU !!!