State Bank of India Report Raises Concerns Over Freebies in Elections

Freebies, especially cash in bank accounts, offered by states to woo voters in elections cost the exchequer up to 2.7% of the state's gross state domestic product (GSDP), sometimes affecting essential welfare schemes. A State Bank of India (SBI) report has raised concerns over freebies and recommended capping spending on implementing freebie schemes such as freebies and cash in bank accounts to a percentage of GSDP so that the government's essential and welfare schemes are not affected. SBI's research report on state spending and budget analysis of cash and freebies given to the public during assembly elections has revealed startling figures. The report states that if we look at state budgets, promises made in assembly elections cost the state exchequer 0.1-2.7% of GSDP, which is about 5-10% of states'total revenue receipts. A separate percentage of total revenue is fixed by the Supreme Court for freebies.