Nirmala Sitharaman asks states doling out freebies to check fiscal health of govt.


Nirmala Sitharaman. Photo: AP

Bengaluru: Union Finance Minister Nirmala Sitharaman on Saturday asked the states doling out freebies to check the fiscal strength of the state government and make budgetary provision accordingly.

Days after the 'rewaris' jibe by Prime Minister Narendra Modi, apparently referring to the freebies given by some state governments, especially the Aam Aadmi Party dispensation in Delhi and Punjab Sitharaman said it was good that the debate has begun.



"You may promise something. Let's say when I say you -- the state government or some government -- you promise something, say I will give you something for free. It could be electricity, it could be anything else. And I'm not saying you should not do it."

"Do it but make sure you understand the financial level of your state, the fiscal strength of your state and having promised it during the election, you won, you come back, ensure that you fulfill it because you have given a word and how, by making sure that your budget will have a provision for it," Sitharaman said during an interactive programme organised by the BJP's Economic Cell here.

"I think it is good augury that the Prime Minister mentioned about freebies and their impact on economy. And there's now a lot of interest on the topic and discussions are commencing but a genuine good debate and building on arguments is so required because any attempt to divert from the core principle which we need to understand, or any attempt to undermine or dilute this debate is a disservice to this country because we all know, governments have responsibilities," she said replying to a question on the financial burden of freebies on the state.

The FM said governments indeed have responsibilities to ensure that good education reaches all its citizens, particularly the poorer sections of societies.

Also, the basic healthcare is taken care of, said Sitharaman adding that when the poor people are involved, some "higher end expert-involving kind of medical assistance is when required, the poor should be able to access it."

In this regard, she said, various committees appointed since independence had always insisted on spending at least six per cent of the Gross Domestic Product on health, education and other basic needs.

Sitharaman said no government till today has denied its responsibility towards education or allowed only the private education to take up the task.

She added the private sector was allowed to participate in taking on the education responsibilities but no government since the independence to till date has ever said there was no need to spend on education.

On the contrary, both Centre and the states participated in the process through Jawahar Navodaya Vidyalaya, Sarva Shiksha Abhiyan, tribal welfare schools, residential schools to provide good quality education to all, Sitharaman pointed out.

"So, if any attempt is being made to say education is being now treated as freebie, sorry. That's an irresponsible misguided statement. So is health. A welfare respecting government, which is what every government of India has been, some successful, some partly successful, some better in success in reaching out, has never shied away from the responsibility on education or health," Sitharaman said.

Sitharaman said she would not give a list of what is freebie and what is not, and preferred leaving the topic to the people to decide.

She however, cited how the free electricity could burden the power generating companies and distribution companies if the financial health of the state is not taken into account.

"You promised them up to 300 units or whatever 300 units of free electricity. For that you know the number of people who should get it, you in your budget make a provision for that, she said.

"Do you have enough fiscal strength. Are you generating enough revenue that you can do all this and take care of your committed liabilities like salary, pension and do your usual thing-- have water, give road, make sure your state has schools, colleges, education, hospitals," she added.

On cryptocurrency, she said the government has already warned earlier saying,"please -- Caution is the word. So I think all of us will have to share our thoughts and move with a bit of caution on this. There is immense possibility when you're talking about the technology, but how and where and what trajectory it takes is something which all of us will have to be concerned about and watch for," she said.

To a question on inflation, Sitharaman said, "I have to manage inflation but I have to encourage growth. There is no way in which I will go on reconciling. It's not reconciling. Well, alright, if you're really a stickler to that word reconcile. Yes, it is reconciliation, but the approach that we are taking is growth," she said. PTI

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