New Delhi : The Supreme Court of India has sharply criticised states for announcing “irresponsible” freebies that strain public finances, questioning the timing and fiscal logic of such decisions while hearing a matter related to electricity subsidies. Observing that many states are already running revenue deficits, the bench questioned how governments could afford large subsidy commitments without prior fiscal planning.
The Supreme Court of India observed that it was aware of instances in several states where welfare schemes were announced suddenly ahead of recent elections. If direct cash transfer schemes are announced, will people work anymore, the Court asked. If governments continue to provide free money, electricity, and other amenities, who will ultimately bear the cost?” the court said. The Court stated that the burden of freebies will ultimately fall on taxpayers.
A bench comprising Chief Justice of India Surya Kant, Justice Joymalya Bagchi and Justice Vipul Pancholi made the remarks while hearing a writ petition filed by Tamil Nadu Power Distribution Company Ltd challenging Rule 23 of the Electricity Amendment Rules, 2024. The court noted that had the subsidy been announced in advance, DISCOMs could have factored it into tariff planning and financial projections. Sudden policy decisions, it said, create arbitrariness and disrupt regulatory processes.
Commenting on the freebie system in the country, CJI Surya Kant stated that “distributing freebies in this manner will hinder the country’s economic development. It is the state’s duty to provide facilities to those who cannot afford education or basic living. But those who are enjoying themselves are pocketing the freebies first… Isn’t this something the government should pay attention to? We know of a state where electricity is free, but even if you are a big landlord, you turn on the lights.
He further observed, “We want to ask why schemes are being announced just before elections. All political parties, sociologists, and ideologies need to rethink this. How long will this continue? States are running at a loss, yet they’re still giving them away for free. If you collect 25% of revenue annually, why can’t it be used for the state’s development?
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