Today, On 19th February, The Supreme Court of India sharply criticised pre-election freebies, with CJI Surya Kant questioning whether such blanket welfare served true public interest. He warned that indiscriminate subsidies without distinguishing affordability risk promoting appeasement over support for marginalised citizens.
The Supreme Court of India today delivered strong and cautionary remarks on the escalating trend of state-sponsored freebies, warning that such practices may undermine fiscal stability and distort long-term development priorities.
The matter was heard by a Bench comprising Hon’ble the Chief Justice, Hon’ble Mr. Justice Joymalya Bagchi, and Hon’ble Mr. Justice Vipul M. Pancholi.
During the hearing, CJI Surya Kant expressed concern over what he described as rising “largesse distribution” by several states despite widening revenue deficits.
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The CJI asked a crucial question,
“If not the taxpayer, who ultimately bears the cost?. This is taxpayers’ money.””
The Bench examined whether expanding schemes such as direct cash transfers, free utilities, food distribution, and other welfare benefits were financially prudent when many states reported structural fiscal weaknesses.
The CJI cautioned that unchecked giveaways could seriously weaken developmental spending, remarking,
“If states continue offering free food, free cycles, free electricity, and now direct cash transfers, funds meant for long-term development inevitably shrink.”
The Court pointed to a worrisome trend states running on revenue deficits while simultaneously widening their welfare commitments.
Signalling that essential infrastructure and capital investments might be getting displaced, It observed that,
“Salaries and subsidies may be squeezing development expenditure,”
Justice Bagchi further highlighted the need to differentiate between planned and unplanned expenditure, stressing that fiscal decisions must be transparently reflected within official budget frameworks.
Raising concerns over power subsidies, the Bench highlighted potential financial inconsistencies in post-tariff declarations.
It noted that,
“Granting free electricity after tariffs are notified may introduce arbitrariness into financial administration.”
The CJI also pressed the state on whether tax revenues were being channelled appropriately, asking,
“If a substantial portion of annual revenue is collected, why should it not be channelled towards infrastructure and development rather than expanding subsidies?”
Responding to the Court’s observations, Senior Advocate Gopal Subramaniam highlighted governance-related challenges and emphasised the need for equitable allocation of resources, especially in a climate where revenue-expenditure gaps were widening.
CJI Kant Remarked,
“Is it in the public interest that…the State is absorbing all these? Because of freebies, the entire country is already…we are not talking of Tamil Nadu in particular. We are talking of pan-India. What kind of culture are we developing? What is the the distiction between persons who are capable of paying the electricity bill and persons who are marginalised? It is understandable that, as a welfare state, you want to provide relief to the marginalised. But without drawing any distinction between those who can afford and those who cannot afford, if you start giving, will it not amount to a sort of appeasing policy?”
After hearing the submissions, the Supreme Court issued notice and directed the concerned state to file an affidavit explaining the financial sources and sustainability model behind such large-scale welfare schemes.
The Court was hearing a writ petition submitted by the Tamil Nadu Power Distribution Company Ltd, which contests Rule 23 of the Electricity Amendment Rules 2024.
Case Title : TAMIL NADU POWER DISTRIBUTION CORPORATION LIMITED Versus UNION OF INDIA AND ANR, W.P.(C) No. 158/2026
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