In a democracy, voters wield immense power, but economist and 16th Finance Commission Chairman Arvind Panagariya has posed a critical question: Are citizens making informed choices? Addressing the media in Goa, Panagariya’s remarks about the trade-off between freebies and better infrastructure were not just theoretical—they were a stark warning. This warning gains significance ahead of the upcoming Delhi elections, where political parties are vying for voter support with extravagant promises. Panagariya’s comments come amidst high-profile announcements such as AAP’s Rs 18,000 monthly salary for temple priests and gurudwara granthis, Congress’s “Jeevan Raksha Yojana,” which promises a Rs 25 lakh health insurance scheme for every Delhi citizen, and BJP’s counter-pledge of 300 units of free electricity (up from AAP’s 200 units) alongside 500 units of free power for Hindu temples. While these promises may seem appealing in the short term, they reveal a troubling trend: the increasing prioritization of freebies over sustainable, long-term development. The impracticality of such schemes is evident from Congress’s recent challenges in Himachal Pradesh, Karnataka, and Telangana. Despite winning these state assemblies, the party now struggles to implement its ambitious giveaways.
In stark contrast, Panagariya underscored the importance of using public funds judiciously—investing in roads, drainage systems, and water supply rather than one-time handouts. During his visit to Goa, where state officials sought a four-fold increase in their share of central taxes, Panagariya emphasized that funds allocated for infrastructure should not be diverted for populist measures. While the Finance Commission lacks the authority to control how states spend their funds, it can offer guidance to maintain macroeconomic stability. Ultimately, however, the responsibility lies with voters. Panagariya’s pointed remark – “Citizens should decide whether they want better amenities or freebies transferred to their bank accounts”—is a call to introspection. This issue isn’t just about fiscal policy; it’s about the future of governance. Freebies might provide immediate gratification, but they often come at the expense of long-term investments critical to economic growth and quality of life. For instance, Goa’s request to reallocate tax devolution criteria by reducing the “income distance” weightage from 45% to 30% underscores the need for resources to address infrastructure challenges. Yet, if these funds are siphoned off for populist measures, the very purpose of such allocations is defeated. The fierce competition in Delhi’s political landscape amplifies Panagariya’s concerns. The electoral promises being made—often without a clear funding strategy—raise questions about fiscal responsibility. While these pledges may win votes, they risk derailing the larger goal of sustainable development. Panagariya’s warning is timely and vital. Citizens must recognize the long-term consequences of their choices. Electing governments based on freebies rather than a vision for infrastructure and growth undermines the nation’s progress. As Delhi heads to the polls, voters must weigh their priorities carefully. Choosing better roads, efficient drainage systems, and reliable water supply over short-lived handouts is not just a fiscal decision—it’s a step toward a more sustainable future for all.