Freebies
Topic: Government Budget, Fiscal Policy and FRBM · NCERT: Beyond NCERT
Meaning
Freebies are goods, services or cash that governments give free of charge, often promised during elections. The debate is about where to draw the line. Some spending is productive welfare that builds people's capacity, such as spending on health and education. Some is populism (policies chosen mainly to win votes) that strains budgets, crowds out capital spending and adds to debt. The concern is sharpest for state finances, where revenue is limited.
Example
In 2022, a PIL by Ashwini Upadhyay brought the freebies question before the Supreme Court. The RBI has warned about the strain on state finances. The 16th Finance Commission has called for rationalising unconditional cash transfers, such as states' quasi-UBI schemes for women and farmers.
Don't confuse with
- Merit goods: goods such as education and health that society values more than private demand does, so subsidising them is economically justified. Freebies are free handouts whose value to society is the subject of the debate.
Related concepts
- Subsidy
- Cash transfers
- Targeting errors
- JAM trinity
- Universal Basic Income
- Performance budget
- Outcome budget
- Zero-based budgeting
- Gender budgeting
- Green budgeting