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Informist, Thursday, Feb. 19, 2026

 

NEW DELHI – The Supreme Court Thursday said that states were running in deficit but still giving freebies to people, and questioned them on the source of their funds. "See, 25% of revenue you (states) collect in a year, why can it not be used for the development of the state? You can have a long-term plan for roads, irrigation, electrical, whatever you want," said a bench led by Chief Justice of India Surya Kant. 

 

The top court said that states should create avenues for employment so that people can earn and maintain dignity and self-respect. If states start giving free food, free gas, free electricity and directly transfer cash into people's accounts, why would the people work, the apex court asked. "From where they are going to learn the work when they know everything I will get from one platform? Is this the nation-building we are doing?" said Chief Justice Kant.

 

"Even if you are a revenue-surplus state, is it not your obligation to spend that amount for development for the overall public to develop infrastructure, hospitals, schools, colleges?" the court asked. Instead, states keep on distributing things at the time of elections, it said.

 

"Why suddenly these schemes are announced and the deployment (of it) happens near elections," the top court said. It is high time that political stalwarts, leaders, political parties and all social engineers need to revisit everything, it said. "We will be hampering the development of the nation if we keep on having this largesse distribution."

 

The bench, also comprising Justice Joymalya Bagchi and Justice Vipul Pancholi, said it was understandable when some people couldn't afford and the state government decided to provide freebies to those incapable of paying electricity charges. But if the state, without drawing a distinction between those who can afford and those who cannot, starts giving freebies, it would amount to an appeasing policy, the bench said. 

 

There are children who cannot afford education, so the state must provide and this is their duty, the court said. However, for those who have all means available and are affluent, any kind of freebie is directly landing in their pockets, the court said. It is high time for states to revisit these policy frameworks, the court said.

 

The issue was not confined to any one state, but to all states throughout the country, the court said. "If you really want to do all this, put it in the budgetary allocation and then justify how you will do so," it said. A state cannot suddenly decide to give free electricity to a particular community, and the manner in which it does so creates arbitrariness in fiscal administration, said the apex court.

 

Last year, the Supreme Court had asked all states to clear dues to power distribution companies and asked the Appellate Tribunal for Electricity to monitor the recovery of money. Thereafter, the electricity tribunal, while hearing a plea, said there was no clause in Electricity Act, 2003 that required the Tamil Nadu Electricity Regulatory Commission to refrain from discharging its statutory obligations of determining tariff and liquidating the regulatory assets along with carrying cost, on the premise that the state government was bearing the losses of the utility. The electricity tribunal said that the Tamil Nadu commission, a wholly-owned arm of the state government, should compute carrying cost in terms of the directions issued by the Supreme Court and in terms of Rule 23 of the Electricity Rules 2005. Challenging the electricity tribunal's order, the commission and others moved the top court, which Thursday issued a notice to the Centre. While hearing the case, the top court made remarks against Tamil Nadu and others states on the freebie culture, including free electricity to consumers.

 

According to media reports, as of now, over 23 million consumers in Tamil Nadu were enjoying free electricity of up to 100 units bimonthly, regardless of the level of consumption. In the current year 2025-26, the estimated subsidy bill was INR 77.52 billion, according to reports.  End

 

Reported by Surya Tripathi

Edited by Avishek Dutta

 

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