Freebies can’t replace factories

In a recent hearing, the Supreme Court of India made a sharp observation: governments cannot rely endlessly on freebies while ignoring the need to create sustainable employment.

The remark was not aimed at one state alone. But in Tamil Nadu, it felt uncomfortably relevant. Welfare has its place. But welfare without jobs is not a development model — it is a stopgap.

This is a state that has historically done welfare well. Subsidised food, free bus travel for women, health insurance schemes and targeted cash transfers have softened the blow of inflation and protected vulnerable households.

In many working-class neighbourhoods of Chennai and in drought-prone districts like Ramanathapuram, these schemes are lifelines. Welfare in Tamil Nadu is not merely populism but is rooted in a long Dravidian tradition of social justice.

But a safety net is not the same as a ladder. Across the state, unemployment particularly among the educated is emerging as a silent crisis.

Visit any government exam coaching centre in Madurai or Salem and you will find graduates preparing for years for a handful of posts. For lakhs of young people, the aspiration is simple: a stable job with predictable income. That aspiration is not being met at scale.

This is where the debate must shift from distribution to production. Tamil Nadu’s welfare model was sustainable because it rested on a strong productive base. The auto hubs near Sriperumbudur, the textile clusters of Tirupur and Erode, the engineering units of Coimbatore and the leather industries of Vellore generated employment across skill levels. Industrial growth expanded the tax base, which in turn funded social schemes.

It was a virtuous cycle. Today, that cycle is under strain. Industrial clusters are grappling with rising input costs and tighter margins. The closure of major units such as the Sterlite Copper plant in Thoothukudi has had ripple effects on downstream industries.

Manufacturers dependent on copper have had to source material from other states at higher prices, affecting competitiveness and, by extension, hiring capacity. Small and medium enterprises, the backbone of Tamil Nadu’s economy, operate in survival mode rather than expansion mode.

Yet, instead of doubling down on economic revival, the political spotlight is elsewhere. The Special Intensive Revision of electoral rolls has sparked legal battles and charges of constitutional overreach. NEET and the National Education Policy continue to be framed as existential threats to Tamil identity and social justice.

These are important debates in a state that has fiercely guarded its linguistic and federal rights. But while politics revolves around resistance and symbolism, bread-and-butter economic questions struggle for equal space.

Welfare schemes can cushion these transitions. They can ensure that a family does not fall into destitution when a job is lost. They can support women’s mobility and children’s nutrition. But they cannot replace the dignity of stable work and its ability to sustain a thriving local economy. Nor can they sustain state finances indefinitely without a growing tax base powered by industry and enterprise.

As 2026 approaches, voters may not reject welfare. Few would. But voters may well ask: where are the new industries? How are skills being aligned with emerging sectors like electronics, green energy and advanced manufacturing? The Supreme Court’s observation is less a rebuke than a reminder. A safety net prevents a fall. Only jobs build a future.

(P R Kovilan Poongkuntran, the author, is a Supreme Court advocate)

Disclaimer: The views expressed above are the author's own. They do not necessarily reflect the views of DH