More than just a fiscal problem

Freebies are the palliative politicians offer to tide over economic asymmetry. Statesmanship, not grandstanding, should guide the debate on it

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Federalism and separation of powers are among the most important tenets of India’s constitutional framework.

A sound fiscal state, while a later addition to the statute, is the bulwark without which the nation’s well-being will be threatened. Each of the three is indispensable for the country’s stability and long-term well-being. However, these first principles do not guarantee that the three will not be in conflict with each other. In fact, we have entered an age where this conflict is becoming the norm rather than the exception.

The Supreme Court’s outburst on Thursday — observations rather than a decree — against the socalled “freebie” culture in the country, while hearing a case filed by the Tamil Nadu government defending its right to provide subsidised power, is one such example. The matter reached the Court because a central law prohibits the Tamil Nadu government from continuing to provide subsidised power. The law is for the greater good. Power subsidies and their fiscal overhang are systemic problems facing state finances in India.