Ahead of a number of states going to polls in the latter half of 2023, including Rajasthan, Chhattisgarh and Madhya Pradesh, which have announced a host of freebies to woo voters, Prime Minister Narendra Modi told Moneycontrol in an exclusive interview that there is a need to eschew such “financially irresponsible schemes”.
“In our own country too, on multiple platforms, I have spoken about the need to be alert against financially irresponsible policies. The long-term implications of such policies destroy not only the economy but also society. The poor pay a heavy price,” the PM told Moneycontrol.
In the last few months, states have announced a slew of freebies from monthly cash transfers to additional income guarantee schemes.
Rajasthan, for instance, announced a Rs 2,500-crore minimum income guarantee scheme, subsidised gas cylinders, free electricity and a welfare scheme for gig workers. Meanwhile, Chhattisgarh is banking on providing a monthly allowance scheme for unemployed youth and Madhya Pradesh has announced a welfare scheme for women.
The Prime Minister also spoke about the larger picture. “There is a larger movement that is happening beyond all these institutional mechanisms. In this information age, news about the debt crisis in one country is travelling to many other countries. People are analysing the situation and awareness is spreading. India's G20 presidency in 2023 has placed great emphasis on addressing the global challenges posed by the debt crisis in low-income and middle-income countries,” Modi said while iterating on the need for fiscal prudence in his interaction with Moneycontrol.
India has been diligently advocating for the interests of the Global South in this crisis and is working on strengthening multilateral coordination to facilitate coordinated debt treatment for debt-distressed countries.
“At a meeting of G20 finance ministers and central bank governors, it was acknowledged that good progress has been made in debt treatment of both countries covered under the common framework and outside the common framework,” he said.
Additionally, to accelerate debt restructuring efforts, the Global Sovereign Debt Roundtable (GSDR), a joint initiative of the International Monetary Fund, World Bank and the G20 presidency, was launched earlier this year. This will strengthen communication and foster a common understanding among key stakeholders, both within and outside the common framework, for facilitating effective debt treatments.
“This is helpful for other countries to take precautionary steps to avoid a similar situation in their own countries, with the people’s support. Yet again, the good thing is that people are becoming increasingly aware of the problem,” Modi said
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