India’s Supreme Court on Thursday issued one of its sharpest judicial rebuke yet of the country’s growing culture of “freedom,” warning that indiscriminate welfare benefits could weaken work incentives and undermine long-term economic development.
The court, after hearing a petition related to Tamil Nadu’s state-owned power company, said it was time to review the policy that offers universal subsidy without assessing whether the beneficiaries can afford to pay. Although the court recognized the legitimacy of targeted support for the poor, it questioned the political logic and fiscal sustainability of blanket benefits.
Supreme Court challenges state ‘freedom’ policy amid fiscal stress
The comments came as the Supreme Court took cognizance of a plea by Tamil Nadu Power Distribution Corporation Ltd, which proposed to provide free electricity to all consumers irrespective of their financial status.
Read also | The Supreme Court called out the freebie culture. Does it promote idleness?
“Most of the states in the country are low income states and yet they offer such leeway” in view of development, the bench said.
The bench consisted of Chief Justice Surya Kant and Justices Joymalya Bagchi and Vipul M Pancholi.
“What kind of culture are we developing in India?” asks the court
During the hearing, the court distinguished between social assistance for those unable to pay and universal benefits, which include financially secure households.
“What kind of culture are we developing in India? It is understandable that as part of the welfare measure you want to provide to those who are unable to pay their electricity bills,” the bench asked.
“But without distinguishing between those who can afford it and those who cannot afford it, you begin to distribute. Will that not constitute a policy of appeasement?” asked the CJI.
Read also | Delhi polls: Who offers you more money and freebies – AAP, BJP or Congress?
The remarks reflect broader concerns among policymakers and economists that competitive populism is increasingly shaping state budgets, often at the expense of infrastructure, job creation and other growth-related investments.
The court warns that bonuses can harm economic development and work culture
The Supreme Court said the country’s economic development was hampered by what it described as “grand distribution”, arguing that governments should prioritize job creation rather than expanding universal benefits.
The bench said states should work on creating employment opportunities rather than providing free food, bicycles and electricity to all.
“States should work to open avenues for employment. If you start giving free food from morning to evening, then free cycle, then free electricity, then who will work, then what will happen to the work culture,” asked the CJI.
Read also | Meet the ‘God of Freebies’: An Investor Who Lives Only on Coupons and NO Money
The court also noted that states often spend disproportionately on salaries and subsidies rather than on development projects.
The bench said that instead of spending on development projects, states are doing two jobs – paying wages and distributing such bounties.
A Tamil Nadu power company is challenging the 2024 electricity amendment rules
The comments were made while the court was hearing a plea by state-run distribution company DMK challenging provisions under the 2024 Electricity Amendment Rules.
However, the Supreme Court drew the attention of the Center and others to the petition.
Read also | Free services are not fiscally sustainable, but there is no need to ban them
The bench also questioned the timing of the Tamil Nadu utility’s push to extend free electricity and asked why it decided to loosen the purse strings after the electricity tariff was announced.
The court’s intervention comes amid an intensifying national debate about the costs of welfare promises, the political incentives behind universal subsidies and the long-term risks of funding such programs in states with revenue deficits.