SBI Report Flags Freebies Time-Bomb, Asks Supreme Court To Cap Spends
NDTV
On the cost of the election promises made by various political parties in the poll-bound states as percentage of revenue receipts and own tax revenue of these states it is 1-3 and 2-10 in Himachal 5-8, and 8-13 in Gujarat, respectively
With states after states competing to offer freebies, a report has suggested that the Supreme Court-led panel could cap such welfare schemes at 1 per cent of the state's GDP or 1 per cent of its own tax collection.
Citing the examples of just three states, a report penned by Soumya Kanti Ghosh, the group chief economic adviser to State Bank of India, said annual pension liabilities of the poor states of Chhattisgarh, Jharkhand and Rajasthan are estimated at Rs 3 lakh crore.
When looked in relation to these states own tax revenue, pension liabilities are quite high for Jharkhand, Rajasthan and Chhattisgarh at 217, 190 and 207 per cent respectively.
While for states contemplating the change, it would be as high as 450 per cent of own tax revenue in case of Himachal Pradesh, 138 per cent of own tax revenue in case of Gujarat and 242 per cent of own tax revenue for Punjab, which is also planning to revert to the old pension system wherein the beneficiaries pay nothing.
