Freebies in Governance: Welfare or a Political Trap? Written by Swapnodeep Sen

//Swapnodeep Sen//

In today’s democratic system, many governments offer freebies such as free electricity, cheap or free food grains, free bus or train travel, free healthcare, free education, laptops for students, or even cash transfers. These are done to support poor people and also to gain public support before elections. In India, during the COVID-19 pandemic, the government gave free food grains to nearly 813 million people under PM-GKY and PM-GKAY schemes. In 2022-23, the Indian government spent almost ₹6.8 lakh crore (around 82 billion US dollars) on such welfare schemes, compared to ₹2.6 lakh crore in 2014-15. The government also claims that eight major schemes in housing, healthcare, water supply, and education have helped reduce poverty, increase school admissions, and provide safe drinking water to millions.

Many experts believe that these freebies are important in times of crisis. They reduce poverty, help poor people survive, and let them invest their saved money in health, education, or small businesses. They argue that these schemes help the poor become part of the economy in the long run. Also, modern technology like Aadhaar biometric verification has made it easier for the right people to get these benefits without corruption or misuse.

But there is another side to this story. The growing use of freebies is creating serious problems for state finances. Take the example of Punjab. The state government promised 300 units of free electricity to every family. This alone costs ₹50 crore every day. Every year, Punjab spends more than ₹24,000 crore only on free electricity, which is even more than its total budget deficit of ₹23,198 crore. This means 10 percent of Punjab’s total budget of ₹2.04 lakh crore is spent only on this free electricity promise. In the last 25 years, Punjab has spent ₹1.18 lakh crore on free power, which is nearly half of the state’s total debt. As power usage keeps growing—by 20 percent in 2022-23 and expected to rise another 17 percent by 2024-25—the problem will get worse.

Other states like Rajasthan, Chhattisgarh, Jharkhand, and Haryana also face similar trouble. Reports show that some states spend 190 to 217 percent of their total tax income just to pay for pensions. Andhra Pradesh, Gujarat, and Rajasthan spend between 15 and 24 percent of their income on subsidies, while the national average is only 6.75 percent. Both RBI and SBI have warned that too many freebies make goods and services more costly, stop private businesses from investing, reduce people’s interest in working, and force governments to take hidden loans which reached 4.5 percent of India’s GDP in 2022.

As a result, there is less money left for important things like roads, hospitals, schools, and industries. States like Punjab are going deeper into debt, which may reach ₹4.17 lakh crore (44.1 percent of its economy) by 2025-26. Because of this danger, the central government has reduced Punjab’s borrowing limit by ₹16,700 crore to force the state to fix its finances quickly.

So what can be done? Experts say that freebies should not be given to everyone. They should only be given to the poorest people who truly need help. Also, instead of spending on short-term gifts, the government should invest in things that will help in the future, such as solar power, education, and skill development.

One example is Gujarat’s Jyotigram Yojana, where villages got reliable electricity and losses in power supply were reduced from 35 percent in 2004 to 19 percent in 2014. This saved money and improved services at the same time. Now the central government has started Pradhan Mantri Surya Ghar Muft Bijli Yojana, under which 1 crore houses will get rooftop solar systems with subsidies up to ₹78,000. These houses can produce their own electricity, which saves government money too.

For this to work well, states must control their budgets better, follow strict financial rules, and slowly reduce their debts, as the RBI suggested. At present, India’s total government debt is 28.5 percent of GDP, which is still more than the safer level of 25.3 percent before COVID. States like Delhi, which have spent less on unnecessary freebies, are now able to spend more on building roads, hospitals, and industries.

Therefore, the solution is clear. Governments must change their thinking. Instead of offering free gifts to win elections, they should plan long-term welfare schemes that make poor people stronger and self-reliant. Freebies should not be for everyone but only for those who truly need support based on income or poverty levels. Also, every scheme should aim to improve education, health, skill training, employment, and renewable energy, so that poor people can earn their own living in the future.

Strict rules should be made so that no state spends more than it can afford on freebies. If such care is not taken, states will keep falling into debt, borrow more money, and in the end, common people will suffer as governments will have to cut important services or raise taxes.

In short, while freebies can give some short-term relief to the poor, they are dangerous if not controlled properly. If misused only for political gain, they will create more problems than they solve. They increase government debt, stop development, reduce jobs, and harm the economy in the long run.

If governments really want to help people, they must focus on making the poor strong, skilled, and independent—not dependent on free things forever. Otherwise, freebies will remain a political trap that looks good today but will harm the country tomorrow.