Nirmala Sitharaman, the Finance Minister of India, has recently addressed critical issues surrounding election promises, fiscal responsibility, and the financial dynamics between the Union government and state governments, particularly concerning Bihar. Her statements come in the context of upcoming elections and the ongoing debate about "freebies" offered by political parties to woo voters.

Sitharaman has voiced strong concerns regarding the practice of political parties making promises of freebies without adequately considering the financial implications for their respective states. She argues that such "doles" are acceptable only if the state's financial condition permits them. Promising benefits without a clear plan for funding, and then expecting the Union government to foot the bill, is, according to her, "misleading the public". She has urged parties to exercise responsibility and consider the long-term financial burden on future generations.

The Finance Minister has differentiated between genuine welfare measures and unsustainable freebies. She clarified that if a state's budget and finances allow for providing benefits to specific sections of society, with clear expenditure statements and approved by the state assembly, it cannot be termed a freebie. However, promises made solely to win elections, without a sustainable financial plan, fall under the latter category.

Sitharaman also addressed concerns about the distribution of central funds to states, particularly Bihar. She refuted claims of favouritism and highlighted that every state receives its due share of central schemes, grants-in-aid as decided by the Finance Commission, and funds for infrastructure projects like expressways, freight corridors, railways, airports, and seaports. She encouraged states to engage with the Finance Commission to address any concerns regarding tax devolution parameters.

The Finance Minister emphasized the importance of states engaging with the Finance Commission to express their concerns about the parameters based on which the tax devolution principles are laid down. She noted that the government of India generally accepts and implements the Finance Commission's recommendations, especially on core suggestions.

In the context of the Union Budget 2025, Sitharaman highlighted the government's focus on skill development and artificial intelligence for India's future. She also acknowledged the concerns of the middle class regarding taxation, recognizing their pride in being taxpayers and contributing to the country.