Economists say freebies make sense only if a state budget has revenue surplus

Chennai, Aug 21 With the issue of freebies announced by political parties being heard by the Supreme Court, economists are of the view that if there is revenue surplus in the budget then freebies could be implemented.

In simple terms, what is applicable at the home front is equally applicable for the governments - spend if there is a surplus, said economists queried on freebies and subsidies.

"Political parties can announce freebies, subsidies as poll promises. But such poll promises - freebies/subsidies - should be implemented only if there is a revenue surplus in the state budget," K.R. Shanmugam, Director, Madras School of Economics, told .

The state and the central governments are welfare governments and welfare schemes cannot be prohibited, he added.

The current debate about freebies is that they are announced by political parties as part of their poll manifestoes. There are also free schemes implemented by the governments which were not mentioned in the ruling party's manifestos.

The one way out is that the state budget should comply with the Fiscal Responsibility and Budget Management Act

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