Mysore/Mysuru: The Supreme Court has expressed serious concern over the growing culture of ‘freebies’ announced by States, warning that indiscriminate distribution of benefits could hamper economic development and further strain already stretched State finances.
Hearing a plea by Tamil Nadu Power Distribution Ltd., which proposes to provide free electricity to all consumers irrespective of their financial status, the Court on Thursday observed that while welfare measures for the poor are justified, extending them universally without financial prudence could weaken long-term development.
A Bench led by Chief Justice of India Surya Kant, along with Justices Joymalya Bagchi and Vipul M. Pancholi, noted that many States are already running revenue deficits yet continue to announce large-scale free schemes. “Most of the States in the country are revenue-deficient States and yet they are offering such freebies,” the Bench remarked, adding that such spending often overlooks developmental priorities.
“This kind of largesse distribution will hamper the economic development of the nation. Yes, it is the State’s duty to provide, but the ones who are enjoying freebies… is it not something that should be looked at?” the CJI orally observed.
He further questioned whether States were utilising their revenues wisely. “States are running into deficits, but still giving freebies. See, 25 percent of the revenue you collect in a year. Why can it not be used for the development of the State?” he asked.
Concern over work culture
The Bench also cautioned that indiscriminate distribution of benefits could affect productivity and weaken work incentives.
“What kind of culture are we developing in India? It is understandable that as part of a welfare measure, you want to provide for those who are incapable of paying electricity charges,” the Court observed. “But without distinguishing between those who can afford and those who cannot, you start distributing. Will it not amount to an appeasing policy?”
The Judges stressed that States should prioritise employment generation and long-term growth.
Karnataka Govt’s debt likely to reach Rs. 7.64 lakh crore
The Karnataka Government’s debt is likely to reach Rs. 7.64 lakh crore by the end of March 2026. According to sources, the State Government is planning to borrow another Rs. 1.16 lakh core for the next State Budget.
The State’s outstanding liabilities are estimated to reach 27% of its Gross State Domestic Product (GSDP) in 2025-26, raising concerns about long-term fiscal sustainability. Major drivers include the implementation of five Guarantee Schemes with roughly Rs. 60,000 crore expected to be spent.
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