Many states in difficulty due to freebies, high committed expenditure: FM Sitharaman

Finance Minister Nirmala Sitharaman cautioned that excessive populist subsidies and large fixed liabilities are straining state finances, leading to reduced capital expenditure and higher debt. She urged fiscal discipline and outcome-based spending. The article analyses the macro-economic consequences of “freebie politics” and the Centre’s push for transparent budgeting under the FRBM framework. It underscores the growing concern over sub-national fiscal sustainability and governance reforms.