The Supreme Court on Thursday expressed concern over the growing trend of States announcing welfare schemes and cash transfers just before elections. The Court observed that indiscriminate distribution of public funds may hamper the country’s long-term development.
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 Corporation Limited. The petition challenges Rule 23 of the Electricity Amendment Rules, 2024.
Court Questions Blanket Distribution of Benefits
During the hearing, the Bench examined the practice of States absorbing electricity bills and extending benefits without distinguishing between those who can afford to pay and those who cannot.
Addressing Senior Advocate Gopal Subramanium, appearing for the State, Chief Justice Surya Kant asked whether it was truly in the public interest for the State to bear such financial burdens.
He clarified that the Court was not referring to Tamil Nadu alone. The concern, he said, was pan-India. The Chief Justice questioned what kind of culture such policies create.
The Bench noted that while a welfare state must assist marginalised sections, benefits should not be extended indiscriminately. Without distinguishing between the affluent and the economically vulnerable, such measures may amount to appeasement and may not promote economic development.
Development vs. Electoral Promises
The Court observed that even revenue-surplus States have an obligation to invest in infrastructure and public welfare. Funds, the Bench said, should support roads, hospitals, and schools.
The Chief Justice questioned the timing of welfare announcements. Referring to recent elections in certain States, he asked why new schemes are often introduced close to polls.
The Bench also raised concerns about direct cash transfer schemes. It questioned whether sustained financial support without eligibility distinctions could disincentivise employment.
Welfare Must Be Targeted, Says Bench
The Court acknowledged that the State must support those who cannot afford education, healthcare, or essential services. However, such support must be carefully calibrated.
The Chief Justice reiterated that individuals who can afford to pay for services should do so. The Court clarified that it was not encouraging profiteering by State entities. However, recovering costs from those with the means to pay would be fiscally responsible.
The Chief Justice also noted that the Court is currently seized of other petitions concerning the issue of pre-election freebies.
Notice Issued in TN Power Case
In the case of TAMIL NADU POWER DISTRIBUTION CORPORATION LIMITED v. UNION OF INDIA, the Court agreed to examine the challenge to Rule 23 of the Electricity Amendment Rules, 2024.
The Bench issued notice to the Union of India. The matter will proceed after responses are filed.
