Govts need to balance welfare with growth

Governments should restrict themselves to regulating and creating a policy framework that heralds a level playing field for all with definite caps on pricing.
Image used for representational purpose
Image used for representational purpose

Midway into the elections, the Congress has come up with a fresh promise of free rations of 10 kg to the poor if the opposition coalition comes to power. This is twice the monthly ration currently given by the Modi government—foodgrains of up to 5 kg including rice, wheat and millets. The central government has already extended the PM Garib Kalyan Anna Yojana for another five years till 2028-end and said the scheme, which benefits 80 crore poor people, would cost around Rs 11.8 lakh crore.

The Congress had earlier promised Rs 1 lakh to women belonging to below-poverty-line families. Aam Aadmi Party chief Arvind Kejriwal, on his part, has promised 24-hour electricity supply with the first 200 units of power free across the country, something similar to what its government in Delhi is providing. Several other governments, too, have implemented similar social welfare schemes. States such as Tamil Nadu and Kerala have, of course, already benefited from such schemes and the ruling political parties reaped electoral gains, according to political analysts.

It is interesting to note that in the 2024 election, being held seven decades after India’s independence, ‘free ration’ is turning out to be a major draw. But is there anyone counting the cost of all such promises? It should not put the governments at a precarious financial risk.

Clearly, governments are not able to strike a balance between social infrastructure development and economic growth. L&T, which owns 90 percent of the Hyderabad Metro project and holds a 65-year concession to run it, is recently reported to be planning to sell off the stake after 2026. It has blamed the free bus scheme initiated by the Congress government for women and transgenders.

Providing food, affordable housing, healthcare and quality education should be among the primary jobs of every government. It is important to nurture a healthy population with basic education and prepare them for employment prospects. Governments need to ensure that their free services are not encroaching into the space meant for private and public enterprises.

They cannot afford to jeopardise the already-straining fiscal conditions to fulfil their promises. Governments should restrict themselves to regulating and creating a policy framework that heralds a level playing field for all with definite caps on pricing. They should treat themselves as custodians of public and private resources to guarantee everyone a fair share.

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