Freebies, a threat to TN fiscal health

Economists question the rationale behind continuing sops for over a decade

By the end of the next fiscal, the Tamil Nadu government would have spent nearly as much on freebies in 10 years as the entire initial outlay of the Chennai Metro project. 

Over Rs.3,500 crore each has been spent on colour television sets, laptops, and household appliances like mixers and grinders. 

With the State’s finances looking a bit shaky based on this year's budget projections, experts are increasingly beginning to question the rationale behind the slew of sops. 

Lacking a comprehensive beneficiary lists for most schemes and in the absence of evaluation of outcomes, the return on these investments is unclear, say experts. 

The colour television scheme, for example, was launched to improve “general knowledge among women”.

Tamil Nadu currently has the highest density of households with TV sets, and the figures doubled in just a decade, based on Census data.

But whether it translated to anything meaningful is hard to measure and several ongoing populist schemes are no different.

“Because of an over reliance on freebies as official policy, the State has frittered away its good fiscal position,” says S.Chandrasekhar of the Indira Gandhi Institute of Development Research. “Tamil Nadu's fiscal cushion has slowly been eroded. It is hard to keep giving these freebies,” he says. 

Next year is an election year. And the parties in power and opposition, the AIADMK and DMK, are likely to come up with more freebies.