AnanyaAIR 13 · CSE 2025 · 213 wordsTheir whole copy
Opening
The recent concern raised on the freebie culture (non merit subsidies example) by 15th Finance Commission as well as our PM has raised discussions on it.
Non Merit Subsidies includes:
Body · points
- Free power (in agriculture)
- Free Bus Ride / Train ride
- Free electricity
- Free laptops, etc
- free usage of other public service
- Farm Loan waivers, etc.
Non merit subsidy → Deep Fiscal Deficit of few state
States like Punjab have high Debt to GDP ratio (≈ 53% reached)
States like UP, Telangana too suffer from high Fiscal Deficit
States combined debt - GDP ratio ≈ 31% of GDP (against ideal 20% of GDP)
This leads to fiscal unsustainability of many states
Need → Rationalise subsidies
- To optimise the fiscal deficit of India (Presently ≈ 6.9% of GDP)
- To reduce the debt - GDP ratio of the country ( ≈ 85% of GDP)
- To prevent sub national bankruptcy
- To sustain the welfare efforts in long run
- To prevent over dependency of people on state → counter dependency on doles
- To have money for increasing
Close · a way forward
capital expenditure → promote investment
Hence subsidies need to be rationalised. For this the recommendation of FRBM review committee can be taken up