The bench warned that such indiscriminate distribution of benefits could hamper economic development and put state finances under serious strain. It asked states whether such a culture, without drawing a distinction between the haves and the have-nots, would amount to an appeasement policy.
The bench said it is aware of what happened in some states in the recent elections, where welfare schemes were suddenly announced just ahead of the elections. “If direct cash transfer schemes are announced, will people work anymore,” the bench asked.
The sharp oral observations were made by the bench during the resumed hearing of a plea filed by the Tamil Nadu Power Distribution Company, challenging Rule 23 of the Electricity Amendment Rules 2024.
CJI Kant verbally questioned the state absorbing the power bills. “Is it in the public interest that…the state is absorbing all these?” He said the bench was not talking of freebies being doled out by Tamil Nadu alone, but referring to “pan-India”.
“What is the distinction between people who can pay the electricity bill and people who are marginalised?… 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?” CJI Kant orally remarked.
Raising concerns over the growing “largesse distribution” by the states despite rising revenue deficits, CJI Kant questioned how subsidies would be funded, pointing out that any promise of “free” services ultimately has to be paid for by the public. “But this money which the state says it will pay now. Who will pay for it? This is taxpayers’ money,” the judge said. He said governments should focus more on creating jobs rather than expanding welfare schemes.
If states continue rolling out one benefit after another, such as free food, bicycles, electricity and direct cash transfers, development spending would inevitably suffer, CJI Kant remarked.
