Essay : Is freebies culture promoted by political parties in nation's interest ?

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                    (Image Source - https://chennai.citizenmatters.in )
 

Many political parties promise to offer subsidized or free availability of food, electricity, transportation, laptops, electrical equipment as part of their election manifesto. Does this culture promote growth or hampers it, is the hot topic of debate these days.

The first important thing to understand is the motive of providing freebies. Many of the European countries like Germany provide free healthcare and free education to their education. Germany spends almost 11% of its GDP on healthcare. To compensate for these expenses, they charge 14% tax on income and maximum up to 54,000 euros. The motive is quite clear. They don't want a family to go bankrupt just due to paying for sudden high medical costs incurred. So, the country's healthcare expense is distributed among all the taxpayers and everyone is benefited. So, the providing free healthcare is quite beneficial to country's overall growth in long-run. Conversely, the motive of providing freebies just to reach temporary goal of winning election is harmful for economic health.

The second important thing is to consider the population's priority list for full-filling basic needs. For an instance, the state where basic needs like food, shelter, education, healthcare are fulfilled may look forward to provide free internet connectivity in order to grow business, making people self-employed and thereby prospering country's economic growth. On the contrary, the developing country where basic needs are not satisfied, the priority list will be different. The country might look forward to promise its citizens with subsidized education or healthcare or food according to their priority list.

The last but most important point to consider is country's economic situation.For example, spending on freebies would prove a huge mistake in countries where debt to GDP ratio is higher than 60%. In the recent events in Srilanka, government's freebie, the decision to reduce imposed taxes in election manifesto, led country to bankruptcy.

In conclusion, freebies might prove advantageous to economy and nation's interest if it follows 3 simple things : considers country's economic situation, counts on priority list of people needs and the motive to solve people's problem like Healthcare in long-run, instead of just giving away stuffs to win elections.

             

References :

1. Supreme court notice reported by the Hindu - ‘Irrational freebies’ by political parties irk Supreme Court - The Hindu

2. Reserve Bank of India - RBI Bulletin



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