Akshat Shrivastava, founder of Finfluencer and Wisdom Hatch, is sounding the alarm about India’s growing gifting culture, warning it could lead to tax disaster.

Shrivastava, in a post on X, makes a compelling comparison with the US: while the US runs a debt of $36 trillion with interest payments consuming 22% of revenue, the debt of 180 lakh crore of India’s ₹ 40% of its revenue for service, almost. double the burden of the US.

Despite this huge disparity, he cautions: “We continue to reward users with new schemes every day.”

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

Free healthcare for the elderly under the ‘Sanjeevani Yojana’ has also been promised. These announcements have drawn criticism from the opposition, but follow a long-standing trend of political giveaways.

The phenomenon spans party lines. Ahead of the elections, the BJP and the Congress have similarly relied on populist measures. In Maharashtra, the BJP-led coalition promised monthly allowances of ₹1,500 for women, while the Congress promised to double the amount if elected.

Punjab’s promise of 300 units of free electricity has led to a financial strain, with a drastic drop in collection efficiency. Himachal Pradesh is struggling under the weight of restoring the Old Pension Scheme, borrowing heavily just to stay afloat.

Economists have long warned against such practices. NK Singh, chairman of the 15th Finance Commission, has criticized such gifts as a “passport to fiscal disaster”, differentiating them from subsidies that generate long-term benefits, such as education and health. Prime Minister Narendra Modi has also called election giveaways a dangerous trend, urging voters to prioritize development initiatives over short-term handouts.

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