Why should/shouldn’t a government give freebies to citizens?
What is a freebie?
A freebie is a scheme specially designed to benefit a certain class/caste/gender of people. Farm loan waiver schemes, mid-day meal scheme (if strictly speaking), PMUY (Prime minister Ujjwala Yojana) and the latest one, offering free rides for women in Delhi Metro are few examples of freebies.
Effects of freebies on a nation:
Positive impacts:
Some freebies have immensely contributed to the development of society. Mid-day meal scheme is one of them. Since the inception of this scheme, in the last two and a half decades, there has been an increase in the rate of admission and a decrease in the rate of retention of students.
Prime Minister Ujjwala Yojana is surely a good step towards the improvement of lifestyle of Indian poor. The gas connection, which was supposed to be a luxury before, now is being made available to every poor household, thanks to the government. Almost 7 crore household have been benefitted by this scheme till now. It also aims to improve the health of female households.
Recently launched Ayushman Bharat scheme by the government is also a good service, if implemented carefully. Â It is worth mentioning that under this scheme, about 50 crore people of 10 crore poor families of the country are being given health cover of Rs 5 lakh.
In this direction, the step taken by the Delhi government to provide free healthcare to all should surely be welcomed. Delhiites who could not get surgery done at any govt hospital can now get free surgery in 48 private hospitals without worrying about bills. A patient needing surgery can be referred to a private hospital and the Delhi govt will bear the cost of the surgery.
These types of schemes bring a positive impact on society.
Negative impacts:
There is a difference between free money and free services. While schemes like mid-day meal and free medical facility increase the productivity and contribute to growth, the announcements made by political parties just before elections about distributing free laptops/mobiles, free rice etc have the sole purpose to attract the vote bank towards themselves. These types of things also defoliate our image on the global front[1].
The farm loan waiver schemes may provide relief to poor farmers at some level; but on other levels, it encourages them not to return loans. The agriculture in our country is in fact a loss-making business. We should really be grateful towards our farmers that they feed us almost for free. The farmers cannot decide the price of a product in the market; instead, they have to sell their product in APMCs (Agriculture produced market committee). Thinking from this angle makes us believe the fact that the farm loan waiver is actually good for them. But this is not the correct solution for them. The farmers should have some control over the prices of their products. The schemes for the farmers’ welfare need to be well-drafted and implemented. Farm loan waiver is not a good solution, neither a good freebie.
Freebies in other countries:
In other countries, healthcare, education, transports are government’s responsibility and they perform it very well. Recently, Kansas City in the USA became the first major American city to have fare-free public transit. The French government generally refunds patients 70% of most health care costs and 100% in case of costly or long-term ailments. The French health care system is one of universal health care largely financed by government national health insurance. In its 2000 assessment of world health care systems, the World Health Organization found that France provided the “best overall health care” in the world. Approximately 77% of health expenditures are covered by government-funded agencies here. In 2017, France spent 11.3% of GDP on health care, whereas the OECD average was 8.8%, Germany 10.6% and Canada 10%. In 2018, the US spent a whopping 17.1% of GDP on health care. The same figure for India was 2.3% in 2019. Similar is the data for education and transport facilities, too.
Conclusion:
Well, nothing comes as ‘free’. All the money arranged by the government for freebies is basically the taxpayer’s money. There is no doubt that the idea of freebies results in bad economics. The distinguishing line should be based on the fact that whether a free commodity is disincentivising the labour force or not. It’s the money of the public used for upliftment of the weaker section of our society. It should be ensured by us that the use of our money actually makes a positive contribution. Incentivising a particular section without taking anything in return only makes them inactive in the long run. The freebies should be provided in such a manner that it prepares people to work proactively and contribute to the economy of the nation, which in turn brings prosperity and adds to its development.
References:
- https://www.irishtimes.com/news/world/middle-east/india-s-poor-offered-smartphones-and-other-freebies-for-votes-1.3700319
- https://timesofindia.indiatimes.com/city/gurgaon/free-laptops-for-govt-school-students-who-scored-90-in-class-10-boards/articleshow/72356630.cms
- https://www.indiatoday.in/news-analysis/story/free-kejriwal-s-free-metro-rides-to-modi-s-direct-cash-transfer-decoding-freebie-politics-in-india-1602745-2019-09-24
- https://www.435mag.com/kansas-city-becomes-first-major-american-city-with-universal-fare-free-public-transit/
- https://www.thehindubusinessline.com/opinion/freebies-that-can-bring-about-positive-change/article28022147.ece
- https://timesofindia.indiatimes.com/readersblog/uvachvichatr/freebies-in-indian-politics-3901/
- https://en.wikipedia.org/wiki/Health_care_in_France
- https://www.indiatoday.in/budget-2019/story/union-budget-2019-explained-in-simple-interactive-charts-major-schemes-all-sectors-ministries-1562786-2019-07-05
- https://economictimes.indiatimes.com/industry/energy/oil-gas/ujjwala-yojana-key-task-for-the-government-economic-survey-2019/articleshow/70073928.cms?from=mdr
- https://timesofindia.indiatimes.com/city/delhi/now-delhi-residents-can-get-surgery-performed-for-free-in-48-private-hospitals/articleshow/59506645.cms
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