"Freebies Are Fine If States Have Resources To Fund Them," Says Nirmala Sitharaman

Are election-time freebies pushing states into dangerous debt traps? Finance Minister Nirmala Sitharaman says welfare schemes are acceptable only if states genuinely have the resources to fund them through their budgets. Speaking at the NDTV Profit Conclave, she warned against the growing trend of financing freebies through off-budget borrowings using state PSUs, calling it a "sleight of hand" that violates fiscal responsibility norms. Sitharaman stressed that borrowing beyond means burdens future generations and undermines FRBM discipline. She also revealed that the Centre is actively helping several states, including opposition-ruled ones, restructure high-cost debt to reduce interest burdens. Her message, welfare is fine, but fiscal prudence must prevail.