The Supreme Court on Thursday questioned state governments’ tendency to dole out across-the-board “freebies” such as free electricity, particularly before elections, without distinguishing between the well-off and the poor.

Most states have been doing this despite being revenue-deficit, the bench of Chief Justice Surya Kant, Justice Joymalya Bagchi and Justice Vipul M. Pancholi said.

“Yes, we can understand that some people cannot afford it. Some people cannot afford education or basic life. Yes, it is the state’s duty to provide,” the bench orally observed.

“But the ones who are enjoying freebies landing in their pockets even if they can afford — is it not something that should be looked at? We know states where there is free electricity even if you are a big landlord. These are people who keep (their) lights on, their machines on, etc.

“If you want to have a facility, you pay for it. But this money, which the state says (it) will pay now... who will pay for it? This is the taxpayer’s money meant for have-nots.”

The bench made the remarks while hearing an appeal from the Tamil Nadu Power Distribution Corporation challenging Rule 23 of the Union power ministry’s Electricity (Amendment) Rules, 2024, that caps power revenue deficit to three per cent.

Rule 23 says: “…The tariff shall be cost reflective and there shall not be any gap between approved Annual Revenue Requirement and estimated annual revenue from approved tariff except under natural calamity conditions: Provided that such gap, created if any, shall not be more than three per cent of the approved Annual Revenue Requirement….”

Justice Kant asked senior advocate Gopal Subramanium, appearing for the corporation, whether a state shouldn’t distinguish “between a person who is capable of paying the electricity bill and the person who is marginalised”.

“We can understand if you want to provide relief to the marginalised. But what you are doing is that without drawing any distinction between those who can afford and those who cannot afford it, you start giving it. Will it not amount to a sort of appeasement policy?” he said.

“The economic development of the nation will be hampered with this kind of largesse distribution…. We are not on Tamil Nadu context only. We are on the fact as to why are schemes being announced just before election?”

The court suggested that political parties, sociologists and other stakeholders revisit the subject of the indiscriminate grant of freebies.

“Even if you are a revenue-surplus state, is it not your obligation to spend that amount for the overall development of public roads, hospitals and schools?” the bench observed.

“Instead of that, you (states) keep distributing food, clothes and people enjoy everything at the time of the elections.”

Justice Bagchi said that if the states really wanted to adopt freebies as a welfare measure, they should mention this in their annual budgets and explain how they expected to find the money for these schemes.

The bench later issued a notice to the Centre on the corporation’s challenge to Rule 23, with the next hearing to be held four weeks later.