The state is running in losses yet free schemes are running; Supreme Court gave advice to the governments on freebies.

Supreme Court on Freebies: The Supreme Court has strongly commented on freebies and termed it as dangerous for the economic development process of the country. The Chief Justice of India (CJI) clearly stated that the states are running in financial losses, yet delivery of free services continues. The CJI also said that such wasteful expenditure could cause serious damage to the economic development of the country.

CJI comments on dangers of freebies

The Supreme Court made this comment during the hearing of the case Tamil Nadu Electricity Distribution Corporation vs Central Government. The CJI said that state governments are providing free food, bicycles, electricity, and now transferring cash directly into people’s accounts. This wasteful expenditure is only eating up the money needed for development works.

The CJI said, ‘Imagine, most of the states are in revenue deficit, yet the same policies are being implemented. If you start providing free facilities right from the morning, then where will the money for development come from?” The state should file an affidavit as to from where this expenditure will be met.

Free facilities despite revenue deficit

The CJI raised the question that if the states are running in losses, then where will the money come from to provide free facilities? He gave the example that at least 25 percent of the revenue that the state collects in a year should be used for the development works of the state.

Freebies and politics

Chief Justice Surya Kant said that freebie schemes are often announced just before elections. The Supreme Court advised political parties and sociologists to reconsider this matter.

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Financial impact of freebies

CJI Surya Kant also said that this money comes from public taxes. If state governments are providing free facilities, then who will pay for them? He also gave the example that in some states even big landowners are given free electricity when they can afford it. The harsh remarks of the Supreme Court have once again raised serious questions on the country’s financial crisis and the economic impact of free facilities.