Gdp Vs Freebies: Financial Advisor Slams Giveaways As ‘wealth Destruction’, Says ‘govt Is Horrid At Capital Allocation’

India’s economical tug-of-war betwixt fostering GDP maturation and doling retired freebies is nary longer a argumentation statement confined to bureaucrats — it’s playing retired publically crossed societal media and influencing elector sentiment.

At nan bosom of this statement lies a stark choice: Should governments thrust semipermanent maturation by investing successful infrastructure and innovation, aliases should they prioritise short-term populism pinch giveaways that triumph votes but perchance weaken economical fundamentals?

Critics pass that an overdependence connected subsidies and handouts hampers fiscal wellness and stunts productivity. Advocates antagonistic that specified use measures are basal lifelines for nan underprivileged. But erstwhile electoral strategies thin excessively heavy connected freebies, nan broader extremity of building a resilient, self-sustaining system risks getting derailed.

Akshat Shrivastava, laminitis of Wisdom Hatch, joined nan increasing chorus questioning nan economical soundness of India’s freebie culture. Taking to X (formerly Twitter), he called retired nan inefficiency masked arsenic generosity.

“Option 1: You are not accounting for nan costs of inefficiency. Every clip nan authorities decides to springiness a free mixer grinder, they are destroying wealth,” Shrivastava wrote. “How? Because to salary for that mixer grinder, they person to taxation a competent personification more. Or devalue their savings by printing much money (what they do currently).”

In contrast, Shrivastava based on for what he called “increasing nan size of nan pie”—or spurring genuine growth. “When you are producing things of value, it leads to growth. And, nan existing indebtedness would beryllium deflated distant owed to existent summation successful productivity. In firm finance: this is called businesslike superior allocation. Government is horrid astatine this,” he said.

Shrivastava’s comments came successful consequence to a personification who outlined 2 contrasting approaches to GDP growth: 1 relying connected redistribution done taxation and freebies, and nan different driven by entrepreneurship and innovation.

“1) You salary taxes and nan authorities spends connected freebies. That personification later spends that money to thief nan GDP.

2. The different personification builds a startup, provides jobs and creates products/services that much group would emotion to buy/use.

GDP is simply a usability of nan velocity pinch which money flows (not considering money printing — I americium taking changeless proviso of money). More nan velocity of money, much nan taxation nan authorities gets. Now show maine which action you would choose,” nan personification wrote.

Published on: Jun 7, 2025 5:34 PM IST