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Finding Equilibrium: Freebies vs. Fiscal Responsibility.



  Oct 27, 2023

Freebies vs. Fiscal Responsibility: A Balancing Act



In India, the debate over providing freebies and maintaining fiscal responsibility has been a crucial issue. Let’s delve into this topic while adhering to your request for simplicity and rigor.

Freebies in Indian Context

Freebies often refer to government initiatives that offer goods or services to citizens at little or no cost.
These can include free healthcare services, education, or even direct cash transfers. Such measures are typically aimed at improving the standard of living and reducing poverty.

Fiscal Responsibility Challenges

However, providing extensive freebies can strain a country’s fiscal resources. Fiscal responsibility involves managing public finances prudently,
ensuring that government spending doesn’t lead to unsustainable levels of debt or inflation. In India, achieving fiscal discipline is a constant challenge.

Current Indian Examples

1. Farmer Loan Waivers: Several Indian states have implemented loan waiver schemes to alleviate the burden on farmers. While this provides immediate relief, it can strain state finances, leading to reduced funds for other crucial sectors.

2. Subsidized Healthcare: The Ayushman Bharat scheme offers free healthcare services to millions of Indians. While lauded for its intent, sustaining this program without compromising fiscal responsibility is a challenge.

3. Direct Benefit Transfers (DBT): The government’s DBT program aims to transfer subsidies directly to beneficiaries’ bank accounts. It reduces leakage and ensures targeted assistance, but managing the financial burden is essential.

Balancing Act

In conclusion, India faces the challenge of striking a balance between providing freebies to uplift its citizens and maintaining fiscal responsibility. Prudent management, innovative financing, and a focus on economic growth are key to achieving this delicate equilibrium.

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