At an event marking Tamil Nadu formation day on November 1, Tamil Nadu Governor Rajendra Vishwanath Arlekar asked Governments to increase people's capacity to spend rather than simply distribute freebies. He said development would not happen without people's active participation.
While campaigning for his party's candidates in Krishnagiri in the run-up to the Assembly elections in March 2026, Naam Tamilar Katchi (NTK) leader Seeman said the DMK and AIADMK have destroyed Tamil Nadu by giving out freebies, which in turn has led to unemployment in the state.
In the name of freebies, the DMK and the AIADMK have destroyed our people for decades. Education and healthcare should be free, and yet private players are making huge profits in these areas, he said.
He also contended that the freebies (TVs, laptops, fans, free bus passes for students, Rs 1000 per month to women) had made people lazy and were a major reason for unemployment in Tamil Nadu.
It's certainly true that in Tamil Nadu, virtually every CM since Kamaraj has favoured welfare schemes (the so-called 'freebies').
"My government's idea is to keep the people happy, and that is why we are extending the freebies. It is also the right of the people to get them from the government without any hesitation at all," said former Tamil Nadu CM M Karunanidhi. He was a staunch advocate of government freebies and viewed them as welfare measures to reduce the gap in the economy.
But in February 2026, the Supreme Court delivered a pointed rebuke to the culture of political freebies, saying that the unbridled handing out of free stuff by the States was detrimental to the country's economic development.
The RBI has also warned that rising subsidy expenditure could crowd out other more productive government expenditure.
However, some experts would argue that the welfare schemes and the direct benefit transfers have to be seen in the context of India's social and economic inequalities.
In a society that is stratified on the basis of caste and access to resources, benefits may take a very long time to reach the most disadvantaged, if indeed they do. Direct benefit schemes are a useful mechanism for delivering welfare. The problem is that there's very little research on the outcomes of such schemes and so the critics have all the say. The answer is more rigorous research, says Sankarganesh Karuppiah in an article in The New Indian Express (April 2026).
Rather than calling for the end of direct benefit welfare schemes, the states should be required to justify their existence through full project reports in the same way as they would for any infrastructure project. The reports would have to set out the need, the cost and the benefits, pre-implementation assessments and post-implementation evaluations to measure the impact.
'Fairness has to be established for all' he said in the article.
Postdoctoral Research Fellow at the University of Cambridge, Vignesh Karthik KR has another take on the debate.
"This is a chicken-and-egg situation. The word 'freebie' is completely wrong. We're not giving anything away. We need a redistribution programme as a result of the growing gap between the rich and the poor. In order to deal with that inequality we have to have the government get involved," he said.
He was explaining the economic logic of state intervention at which point he said the Governor's suggestion was very much the same as teaching people to catch fish rather than just giving them fish. The problem with that approach though was that it didn't take account of the structural imbalances in the global value chain.
Inequality within the global value chain is on the rise. In order to be competitive businesses will look to reduce either their raw material costs or their labour costs. The amount of capital available will determine the maximum amount that it is prepared to pay for labour, but the amount of labour that is required will be determined by what the workers need to live on.
3 in 4 of the Indian workforce (aged 15-59 with recorded earnings) are making less than Rs 20k a month. The top 10% of adults take up nearly 58% of national income and 65% of the nation's wealth.
"In the global value chain capital will say it can only pay X, labour on the other hand needs X+Y to survive. So the government has to step in and subsidise the Y," he explained.
To illustrate his point he pointed to the situation of the migrant workers in Tamil Nadu.
A worker from Bihar or some other northern state who comes to TN will be earning around Rs 13,000 a month for 10 hours of work. He will also need two meals and a cup of coffee every day. That's where the government subsidy comes in, as the Amma Canteens etc. will go a long way to help the worker with his food.
