Finfluencer and Wisdom Hatch founder Akshat Shrivastava is raising the alarm about India’s growing gifting culture, warning it could lead to a fiscal disaster.
Shrivastava, in a post on India requires 40% of its revenue for its service, almost doubling the burden of the United States.
Despite this stark disparity, he warns: “We continue to reward freeloaders with new schemes every day.”
The warning comes at a time when political parties are doubling down on their populist promises. In Delhi, Chief Minister Arvind Kejriwal’s Aam Aadmi Party (AAP) has come up with new schemes, including monthly allowances of Rs 18,000 for priests and Rs 2,100 for women under the ‘Mukhyamantri Mahila Samman Yojana’.
Free healthcare for senior citizens has also been promised under the “Sanjeevani Yojana”. These ads have drawn criticism from the opposition, but continue a long-standing trend of gratuitous politics.
The phenomenon transcends partisan lines. Ahead of the elections, the BJP and Congress have also relied on populist measures. In Maharashtra, the BJP-led coalition promised monthly allowances of Rs 1,500 for women, while the Congress promised to double the amount if they were elected.
Punjab’s promise of 300 units of free electricity has led to financial strain and the efficiency of collection has dropped drastically. Himachal Pradesh is struggling under the weight of reinstating the old pension scheme, borrowing heavily just to stay afloat.
Economists have long warned against such practices. NK Singh, chairman of the 15th Finance Commission, has criticized these giveaways as a “passport to fiscal disaster,” differentiating them from subsidies that generate long-term benefits, such as education and healthcare. Prime Minister Narendra Modi has also termed electoral giveaways as a dangerous trend, urging voters to prioritize development initiatives over short-term handouts.
The Reserve Bank of India echoed these concerns in its recent report on state finances, warning that rising subsidies are crowding out investments in critical sectors such as infrastructure, health and education, areas essential for economic growth. sustainable.
