‘If we end up spreading the wealth…’: Startup founder warns freebie culture is pushing India to the brink

Finfluencer and Wisdom Hatch founder Akshat Shrivastava has raised the alarm over the growing freebie culture in India, warning that it could spell financial disaster.

Shrivastava, in a post on X, makes a compelling comparison with the US: While the US runs $36 trillion in debt with interest payments consuming 22% of revenues, India’s Rs 180,000-crore debt requires 40% of its revenues to service – roughly From doubling the American burden.

Despite this stark disparity, he warns, “We continue to reward exploiters with new schemes every day.”

This warning comes at a time when political parties are doubling down on their populist promises. In Delhi, Chief Minister Arvind Kejriwal’s Aam Aadmi Party (AAP) unveiled new schemes, including a monthly allowance of Rs 18,000 for priests and Rs 2,100 for women under the ‘Mukhyamantri Mahila Samman Yojana’.

Free healthcare for senior citizens has also been promised under ‘Sanjivani Yojana’. These ads have drawn criticism from the opposition but follow a long-standing trend of freebie policy.

This phenomenon extends across party lines. Before the elections, the BJP and Congress similarly relied on populist measures. In Maharashtra, the BJP-led coalition pledged a monthly allowance of Rs 1,500 to women, while the Congress pledged to double the amount if elected.

Punjab’s promise of 300 units of free electricity has led to financial pressures, with collection efficiency declining significantly. Himachal Pradesh is struggling under the weight of bringing back the old pension system, borrowing heavily just to stay afloat.

Economists have long warned against such practices. N K Singh, Chairman of the 15th Finance Commission, has criticized these handouts as a “passport to financial disaster”, distinguishing them from subsidies that generate long-term benefits, such as education and health care. Prime Minister Narendra Modi also termed free electoral handouts as a dangerous trend, urging voters to prioritize development initiatives over short-term giveaways.

The Reserve Bank of India echoed these concerns in its latest report on state finances, warning that rising subsidies are crowding out investments in critical sectors such as infrastructure, health, and education – areas essential for sustainable economic growth.