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Vol. XXVIII No. 19, January 16-31, 2019

Our State of Freebies

By The Editor

Page 1-2 ImageCrowding for freebies at a ration shop.

There was a time when Tamil Nadu was defined by a strong work ethic. This was what put the State in the forefront when it came to industrialisation and, later, the IT revolution. Now no longer. The lack of skills development is partially to blame for this. But what is worse is the culture of freebies that has come to stay. Each successive Government outdoes its predecessor when it comes to handing out unwarranted gifts to the people, thereby destroying all motivation to earn. The latest under this head is a cash gift of Rs. 1,000, apart from a hamper with several commodities, to all ration-card holders in the State. This bonanza will load the exchequer with a further burden of Rs. 2,000 crore.

Those who are concerned about the State’s economic performance are aghast at this decision. Even last year, the State’s finances were classified as precarious – the gross fiscal deficit had trebled over a decade from 2007/08 to three per cent of the gross state domestic product (GDSP). Interest payments have climbed to 13.8 per cent of revenue receipts, up from 7.8 per cent a decade earlier. Both these indices are not in keeping with the norms stipulated by the 14th Finance Commission, which pegs an upper limit of three per cent for fiscal deficit and ten per cent for interest. That all of this is accompanied by a decline in capital expenditure (2.5 per cent of GDSP as compared to 3.6 in 2007/8) shows that less money is available for infrastructure and much of it is being spent otherwise. This year, the budget deficit was planned at Rs 17,500 crores. With this new expense, it will go up to Rs 20,000 crore, assuming the rest of the expenses remain under control.

The problem is, having got on to the freebie bandwagon, it is difficult to get off it. Successive Governments have pandered to this, chiefly to win elections. The rot set in in the 1990s and has only tightened its grip, with parties offering anything from cows and goats to laptops, mixers, cycles, insurance cover and stoves, often with no evaluation on who needs them and who does not. And when a party is elected to power, it appears to think its only job is to please the people. That has converted the State into a populace that thinks it has only rights and no responsibilities. The present administration, in the absence of a strong leader has taken the easy way to popularity repeatedly and the latest announcement is but one more manifestation of it. It appears that the present step was taken keeping in mind the parliamentary elections, due later this year.

That there was nothing other than vote grabbing behind this announcement is evident from the ham-handed manner in which it was done. Earlier, in December, it was announced that a hamper comprising 1 kg each of rice and sugar, with a sugarcane cutting, 20 gms of cashew and grapes and 5 gms of cardamom would be given to each cardholder. Then, in January came the decision to add largesse to it. The reason? To mitigate the sufferings that the population endured owing to cyclone Gaja! This natural disaster was not felt all across of the State. Chennai, for instance, was wholly immune from it.

Leaving that aside, do all ration cardholders really need this gift of Rs 1,000? Are we that badly off as a State? Can there not be some criterion for eligibility? But then if vote gathering is the sole motive, we cannot expect such rational steps. It is just that when the State gets into a debt trap, it is we the people who will pay for it. Till then, our politicians will continue making fools out of us.

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