In a sharp and wide-ranging critique of governments resorting to “freebies”, the Supreme Court on Thursday cautioned that the unchecked distribution of largesse and direct bank transfers (DBT) could encourage dependency and undermine the spirit of nation-building. A Bench comprising Chief Justice of India Surya Kant, and Justices Joymalya Bagchi and Vipul M Pancholi, observed that states must prioritise investment in quality education, healthcare, skill training and job-creation initiatives to ensure citizens have dignified and sustainable livelihoods. Calling the issue a “pan-India problem”, the CJI clarified that the court was not singling out any one state. “It is high time that political stalwarts, leaders and political parties irrespective of their ideologies, along with social activists, revisit such freebie schemes,” he remarked during the hearing.

Petition Over Power Subsidy Rule

The observations came while hearing a petition filed by the Tamil Nadu Power Distribution Corporation, which has challenged Rule 23 of the Electricity (Amendment) Act. The provision seeks to enforce financial discipline among power distribution companies (discoms) by requiring them not to sell electricity below cost, a move that could impact Tamil Nadu’s free or subsidised power schemes.

Though the Bench issued notice to the Centre seeking its response, it did not soften its stance on what it termed the growing “freebie culture”, particularly in relation to free electricity and DBT schemes. “If electricity is given free, both the affluent and the poor will leave machines, water pumps and lights on 24x7 as they do not have to pay for it. There will be no discipline in using a precious commodity,” CJI Kant observed, underlining concerns about waste and fiscal strain. At the same time, the court acknowledged that states may choose to forgo profit in electricity distribution. “If they want to give up the profit element, that is their choice,” the CJI noted, but emphasised the need for accountability and financial prudence.