Modi govt. is the biggest freebie giver for political leverage: Amit Mitra

Even Central schemes could be termed freebies, says economist

Wading into the freebie debate, former West Bengal Finance Minister Amit Mitra said what Prime Minister Narendra Modi government was calling “freebies” were fundamental for the inclusive economic growth of the country. He also added that the Modi government was the biggest giver of freebies for political leverage.

Speaking to a select group of mediapersons, Mr. Mitra, who is now the Chief Economic Adviser to the West Bengal government, said: “It looks like the Prime Minister and his government are looking at themselves in a mirror in terms of freebies. This government has been the biggest giver of freebies for political leverage.”

He pointed out that through eight Central schemes, the Centre pays out ₹1.25 lakh crores, which he said could be listed under the Prime Minister’s definition of “freebies”. “On January 1, 2022, the PM suddenly announced ₹6,000 each to 10 crore farmers as a fresh instalment of direct transfer under the PM Kisan Samman Nidhi programme. A perfect case of a freebie,” he said.

At the same time, Mr. Mitra argued that this debate on “freebie” was absolutely misplaced and the economic measures that the Prime Minister was referring to as revri or freebie were used by most developed nations for inclusive economic growth. He cited the example of the Economic Security Act of the United States of America, under which families of four got $3400 a month as cash. “This is a complete freebie as per the PM’s definition. But this freebie has led to the turning around of the U.S. economy by stimulating demand, like during the Great Depression and thereby, releasing the Keynesian multiplier,” he observed. The United Kingdom, Germany and may other countries had similar programmes, Mr. Mitra said.

Mr. Modi, while speaking at the inauguration of Bundelkhand Expressway at Jalaun in Uttar Pradesh on July 16, had cautioned people against the culture of distributing “freebies for votes”. His comments have triggered a political slugfest

Mr. Mitra also highlighted the Trinamool government’s social welfare schemes that he said helped the economy to gain back its growth momentum, especially post the COVID-19 pandemic.