News India Live, Digital Desk: Are free schemes becoming a hindrance in the country’s progress? The recent report of the country’s largest bank, State Bank of India (SBI), has sparked a new debate. The bank has warned that the ‘freebies’ culture is spoiling the economic health of the states, which can have a direct impact on the national development of the country. The report strongly advises to focus on ’employment creation’ rather than free facilities.

Growing threat of fiscal deficit

SBI economists have found in their research that the budget of many states is now being spent more on free electricity, water and other subsidies rather than on development works. Due to this, the debt burden on the states $\text{Debt-to-GSDP Ratio}$ is continuously increasing. According to the report, if this is not controlled in time, there may be a shortage of funds for infrastructure.

Need a “hands of work”, not a “free hawker”

An important suggestion has been given in the SBI report: ‘Asset Creation’. The bank believes that instead of directly giving money or freebies to the public, the government should invest in schemes that create long-term assets and create jobs for the youth. When people have employment, they themselves will contribute to the economy, which will lead to a surge in GDP.

Is the pace of development slowing down?

The report raises concerns that when a large part of the government goes to non-productive expenses, sectors like education, health and technological innovation do not get adequate budget. This may affect the global competitiveness of the country in the long term.

Experts’ opinion: It is important to maintain balance

Economic experts say that welfare schemes are necessary, but they should not become ‘political tools’. SBI has clarified that only those free schemes are appropriate which empower the lowest section of the society and not those which trap the entire system in debt.