Letters in Economic Research Updates
Promises of Prosperity: The Burden of Freebies on Indiaâs Fiscal Health
Abstract
Sushree Sangeeta Mukhi, Dr. B B Tiwari and Sneha Gosh
This research paper examines the increasing the distribution and declaration of freebies by political parties in India as a strategy to gain electoral support, analysing their detrimental effects on State’s economy. While welfare schemes (subsidies) target specific vulnerable groups, whereas freebies are often discriminately offered to generate offered to general public, leading to fiscal strain. With help of trend analysis and linear regression methods, significant impact of social sector expenditure, Outstanding liabilities and subsidies on the gross fiscal deficit has been studied. The research has used secondary data from the RBI, where the paper conclude that these factors significantly contribute to fiscal imbalances. The advocates clear distinction between Subsidies and freebies to prevent economic disorder because of unchecked financial allocation towards freebies leading to inefficiencies and undermine the nation’s fiscal health.