Supreme Court flags concerns over freebies, says states must prioritise economic development
PTC Web Desk: The Supreme Court on Thursday raised serious concerns over the growing trend of “freebies” announced by state governments, observing that such policies could adversely affect the country’s long-term economic progress if implemented without proper financial assessment.
The remarks came while hearing a petition filed by Tamil Nadu Power Distribution Corporation Ltd, which has challenged certain provisions of the Electricity Amendment Rules, 2024. The state-run power utility has proposed supplying free electricity to all consumers, irrespective of their income levels.
A Bench led by Chief Justice Surya Kant and comprising Justices Joymalya Bagchi and Vipul M Pancholi questioned whether such blanket welfare measures were fiscally prudent.
The court noted that while extending support to economically weaker sections is a legitimate welfare objective, distributing benefits without distinguishing between those who can afford to pay and those who cannot raises policy concerns. The Bench asked whether offering universal subsidies, without targeting the needy, could amount to appeasement rather than genuine welfare.
The judges also pointed out that many states are already grappling with revenue deficits. In such a scenario, they observed, large-scale subsidy schemes could divert funds away from infrastructure and employment generation.
“States should focus on creating employment opportunities and strengthening development initiatives,” the Bench remarked during the hearing. It further cautioned that a culture of continuous handouts , ranging from free food to consumer goods and utilities, might impact productivity and work ethic over time.
The court also questioned the timing of the proposal, asking why the power utility moved to widen benefits soon after electricity tariffs were notified.
Despite its observations, the Supreme Court issued notices to the Centre and other parties concerned on the plea filed by the Tamil Nadu power distribution company and agreed to examine the legal challenge to the Electricity Amendment Rules, 2024.
The matter will now be taken up for further consideration after responses are filed.
- With inputs from agencies
