Power Minister Cautions Against Unsustainable Populist Measures, Points to Rising Debt Traps
In a stern warning ahead of elections, Power Minister RK Singh emphasized the fiscal dangers associated with promising free electricity, cautioning against unsustainable populist measures that could lead states into a debt trap.
Singh highlighted the financial realities underlying electricity provision, stressing that “electricity is not free.” He underscored the necessity for states to have adequate finances to cover the costs of generating and distributing electricity, particularly if they intend to offer it free to certain segments of the population.
The minister’s remarks come amid growing concerns over states, such as Punjab, resorting to borrowed funds to fund populist schemes like free power. Singh warned against the perils of accumulating excessive debt to finance such initiatives, stating that it ultimately burdens future generations and jeopardizes essential public investments in infrastructure, healthcare, and education.
Singh’s criticism was particularly directed towards Punjab, where the Aam Aadmi Party (AAP) government, since assuming power in 2022, has implemented various populist measures, including the provision of free electricity up to 300 units per household. Punjab’s substantial borrowing under the AAP administration, amounting to Rs 47,000 crore in the initial two years alone, has exacerbated the state’s already precarious debt situation.
The minister underscored the detrimental impact of prioritizing short-term electoral gains over long-term fiscal sustainability, cautioning against the erosion of financial prudence in governance. He urged states to exercise fiscal responsibility and refrain from pursuing policies that could potentially push them into debt traps, compromising their ability to meet essential financial obligations and impeding future economic growth.
Singh’s admonition serves as a timely reminder of the imperative for policymakers to strike a balance between fulfilling electoral
promises and ensuring sound fiscal management, particularly in the context of rising debt burdens and economic uncertainties.
