Centre Open To Debate On The Issue Of Freebies: Nirmala Sitharaman

“There should be a genuine debate on this matter. No Indian government has ever denied them. So classifying education and health as freebies, (Arvind) Kejriwal is trying to bring in a sense of worry and fear in minds of the poor,” Sitharaman said in a press conference on Thursday. 

The finance minister was responding to Delhi chief minister Arvind Kejriwal’s comments regarding freebies by political parties during election campaigns. Kejriwal had said that free education, world-class healthcare and employment are not freebies but are fundamental rights, and the duty of a responsible government. 

The debate on freebies is ongoing for a while now. Notably, cautioning people against freebies, Prime Minister Narendra Modi described it as “revdi culture” of offering freebies for garnering votes and called it “very dangerous” for the development of the country. 

A Supreme Court on July 26 termed the promise of “irrational freebies” by political parties during elections as "serious" and wondered why the Centre was hesitant about taking a stand on the issue. On January 25 this year, the top court sought replies from the Centre and the Election Commission on a Public Interest Litigation (PIL) filed by advocate and BJP leader Ashwini Upadhyay against political parties promising freebies during elections. Moreover, on August 3, the Supreme Court asked all stakeholders like the Centre, Niti Aayog, and Finance Commission to brainstorm on the issue of freebies.

A Supreme Court bench headed by Chief Justice NV Ramana on Thursday said that freebies and social welfare schemes are two different things, and a balance has to be struck between the economy losing money and welfare measures. Though the Chief Justice termed the granting freebies as a poll promise to be a “serious issue” he refrained from encroaching into the legislative domain despite a statutory vacuum on the issue.

“Delhi Chief Minister has given a perverse twist to the debate on freebies. Health and education have never been called freebies. No Indian government in its 75 years of independence has ever denied them,” Sitharaman said. 

The Centre provided free and highly subsidised food under the National Food Security Act. The Pradhan Mantri Garib Kalyan Anna Yojana also provides 5 kg of free foodgrain and the scheme would be running for 2.5 years by end of September. 

Kejriwal accused the Centre of not having enough money to pay 100 days’ wages of MGNREGA employees and that there had been a 25 per cent decrease in money for MGNREGA compared to last year. The allocation for MGNREGA was Rs 61,500 crore in Budget 2020-21, before the Covid-19 pandemic. However, this was increased to Rs 1,11,500 crore in the Revised Estimates, of which Rs 1,11,169 crore was actually spent. 

Notably, the issue of welfare versus populism is being discussed in the public domain for a while. While states say that the majority of welfare programmes have to be undertaken by states, the Reserve Bank of India (RBI) has flagged how several states face the threat of facing the same consequences as Sri Lanka because of their economic profligacy. In a recent report, RBI highlighted that the finances of West Bengal, Kerala, Punjab, Rajasthan and Andhra Pradesh were of concern. The report also said that their fiscal health warranted a careful assessment. Interestingly, all five are opposition-ruled states that have had a larger focus on social welfare.

The RBI said that the states’ fiscal conditions had started showing warning signs of stress. The debate over this has set off alarm bells at a time when the states were just limping back to normalcy after the Covid-19 impact and the lingering slowdown while also battling GST compensation woes in their fight with the Centre.