Freebie Debates and Budgetary Priorities: Economic Growth-led India or Inclusive India

Abstract

This article discusses the current debate in India centred on freebie schemes and budgetary priorities. Both are being shaped by India’s political economy within and by globalisation forces outside. Targeting high growth rates and making economies competitively fit are driving this globalization forces. Should budgets prioritise growth or distribution? The Bhagwati–Sen debate provides us insights into the pros and cons of this apparent choice. Economic growth in India has been reasonably good, but not enough employment has been created. The decline in poverty rate has been slower, and in absolute numbers, a staggering number are still poor. India, an erstwhile colonised nation-state, is currently focusing on an infrastructure-led growth budget. The current governing elites assume that growth will take place and benefits eventually will trickle down. It rests its hopes largely on the middle class for high growth rates. The counter-elite voice demands more budgetary allocation for the Indian labouring poor, largely rural. This allocation will widen the participatory base of the economy. The two viewpoints presented here represent two perspectives: an economic growth-led India and an inclusive India. This debate has significant implications for re/distributive policies and programmes and human development.