SC flags fiscal stress of populist schemes
The Supreme Court (SC) on Thursday slammed announcement of freebies and subsidies ahead of elections and said it was time to revisit policies that hamper the country’s economic development. Observing that the ultimate financial burden of such populist measures falls squarely on the shoulders of taxpayers, a bench headed by Chief Justice of India (CJI) Surya Kant asked, “But this money which the State says it will pay now. Who will pay for it? This is taxpayers’ money.”
The observations were made during the hearing of a petition filed by the Tamil Nadu Power Distribution Corporation Limited (TNPDCL), which proposed to give free electricity to all irrespective of consumers paying capacity.
Tamil Nadu Government-owned TNPDCL was challenging the Union Government on Rule 23 of the Electricity (Amendment) Rules, 2024. Rule 23 imposes strict financial discipline on power distribution companies.
“It is understandable when some people cannot afford, you have to provide. There are children who cannot afford education, so the State must provide. It is the State’s duty. There are children who are bright but cannot afford to go to medical colleges. The State must help them. But the persons who can enjoy, have all means available and are affluent and therefore any kind of freebie first comes to their pocket. Is it not high time for the States to revisit these policy frameworks,” the CJI asked.
The bench, also comprising justices Joymalya Bagchi and Vipul M Pancholi, warned that the indiscriminate distribution of largesse is hampering the nation’s economic development and straining State exchequers already reeling under massive revenue deficits.
“We will be hampering the development of the nation if we keep on having this largesse distribution. There has to be a balance. But how long will this continue?” the CJI asked. Tamil Nadu will go to polls this year.
Making it clear that it was not singling out Tamil Nadu, the bench said most of the States are revenue deficit states and yet they indulge in populist schemes like giving free ration, free cycles and asked was it not destroying the work culture? “We are not talking of Tamil Nadu in particular. We are talking of pan-India… It is understandable that, as a welfare State, you want to provide relief to the marginalised. But without drawing any distinction between those who can afford and those who cannot afford, if you start giving, will it not amount to a sort of appeasing policy?” the CJI asked.
