Freebies are not fiscally sustainable but there’s no need to ban them

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Subscribe to enjoy similar stories. In the lead-up to elections, Indian politics frequently centres around promises of state-sponsored ‘freebies’—or giveaways aimed at winning voter support. These range from free electricity and water to subsidized rice and laptops.

Such handouts have become a staple of political manifestos, offering immediate relief to certain groups. However, they also spark concerns over fiscal strain, regional imbalances and long-term viability. Instead of an outright ban, a more constructive approach would be to set up frameworks that promote transparency, fiscal discipline and focused delivery of genuine welfare initiatives.

The practice of announcing freebies has gained momentum in recent decades, with political parties using them as a tool to secure votes. Delhi, for instance, provides free electricity up to 200 units, free water, free bus rides for women and subsidized religious trips for senior citizens. These initiatives have been highly popular and politically effective.

However, Delhi’s relatively high per capita income of ₹414,711 (2020-21) allows the government to fund such schemes without much fiscal strain. Similarly, Tamil Nadu, with a per capita income of ₹212,174 and Maharashtra with ₹183,704 are better placed to implement subsidy-based schemes. In contrast, states like Bihar, which has a per capita income of just ₹50,735, struggle to provide even basic services, let alone freebies.

This regional disparity highlights the uneven nature of freebie politics, where wealthier states can afford such measures but poorer states are left behind. Globally, over-reliance on populist freebies has led to significant economic challenges. Greece, for example, faced a severe financial crisis in the