A FEW MONTHS before Punjab’s last assembly election in 2022, a shopkeeper in Ludhiana summed up the mood of many voters with a shrug: “If electricity becomes free, one tension in life disappears.” For him, free power was not a fiscal debate or a governance dilemma; it was relief.
Across India, millions share that sentiment. Subsidised electricity, free transport, loan waivers and cash transfers promise protection against rising costs and economic uncertainty. Yet the politics of welfare has now moved beyond campaign rallies into the courtroom, raising fundamental questions about the limits of electoral promises, the authority of institutions and the constitutional idea of a welfare state.
The debate intensified after the Supreme Court sought an explanation from the Tamil Nadu government on the fiscal implications of providing free electricity. What began as a policy dispute soon evolved into a larger conversation about whether unlimited electoral promises risk undermining fiscal stability. The controversy has also exposed a complicated legal landscape involving the courts, the Election Commission and the Representation of the People Act, 1951, where the line between welfare policy and electoral inducement remains blurred.
The constitutional dimension of the issue makes the matter particularly delicate. Indian courts have traditionally exercised restraint when it comes to economic policy. Welfare programmes, subsidies and public spending priorities are regarded as decisions that fall primarily within the domain of elected governments. Judicial review allows courts to examine whether a policy violates constitutional provisions or statutory law, but courts generally avoid evaluating the wisdom of economic policy itself. This principle of judicial restraint reflects the separation of powers embedded in the Constitution.
The Constitution further complicates the debate. Through the Directive Principles of State Policy, the state is obligated to promote social and economic welfare, reduce inequality and secure a dignified standard of living for citizens. Many welfare schemes criticised as freebies are defended by governments as fulfilment of these constitutional obligations. Subsidised food distribution, public health care, income support schemes and free education programmes are often framed not as political gifts but as instruments of social justice.
“The tension around freebies reflects a broader constitutional balancing act,” senior advocate Ashish Kulshrestha told THE WEEK. The Constitution itself does not prescribe a precise boundary between welfare and populism; that boundary emerges through interpretation and political practice, he added. “Courts, therefore, face an institutional dilemma,” he said. “If they intervene too aggressively, they risk entering the policy domain of the legislature. If they stay completely away, concerns about fiscal responsibility and electoral fairness remain unresolved. Ultimately, many of these questions are meant to be resolved through democratic accountability rather than judicial prohibition.”
The legal debate has also drawn attention to the role and limits of the Election Commission of India. The EC derives its authority from Article 324 of the Constitution, which entrusts it with the responsibility of conducting free and fair elections. However, its regulatory powers over government policy decisions become effective after elections are formally announced.
Once the election schedule is notified, the Model Code of Conduct comes into force. The code bars governments from announcing new schemes, making financial grants or taking policy decisions that could influence voters. The objective is to ensure a level-playing field among political parties during the election period. Before that stage, however, the EC’s authority is limited.
“The Election Commission’s powers in this area are often misunderstood,” said P.D.T. Achary, former secretary-general, Lok Sabha. The Model Code of Conduct is not a statutory law, he elaborated, but a set of agreed norms guiding political behaviour. “It can regulate government announcements that may influence voters during the campaign period, but it cannot legally prohibit political parties from making promises in their manifestos,” said Achary. “The Representation of the People Act addresses corrupt practices such as bribery or undue influence, but policy commitments do not automatically fall within that definition. Unless Parliament introduces a specific legal framework regulating such promises, the commission’s jurisdiction over manifesto-based welfare pledges will remain limited.”
This gap has become a central issue in petitions before the Supreme Court. Bengaluru resident Shashank J. Sreedhara, in his petition, has argued that promises of freebies amount to inducement of voters and should therefore be treated as corrupt practices under the Representation of the People Act. His petition also seeks directions to prevent political parties from making such promises during the period preceding elections.
The legal challenge lies in defining that period. Indian electoral law does not recognise a statutory pre-election period during which welfare announcements are prohibited. The Representation of the People Act also does not contain provisions that directly regulate welfare schemes or policy announcements made prior to the declaration of elections.
The ambiguity becomes stark when it comes to election manifestos. Political parties typically release their manifestos during the campaign period, when the Model Code of Conduct is already in force. While the code prevents governments from announcing new schemes during this time, political parties are free to promise similar benefits in their manifestos. The Representation of the People Act does not explicitly regulate manifesto promises, and electoral law does not classify them as inducements or corrupt practices.
Recognising the potential impact of such promises on voters, the Election Commission introduced guidelines in 2013 asking political parties to indicate how they intend to finance the commitments listed in their manifestos. However, these guidelines are advisory, and not legally binding.
As a result, the legal framework governing welfare promises remains fragmented. Senior advocate Ankit Jain explained that the controversy over freebies sits at a sensitive institutional boundary between judicial review and democratic politics. “Courts can highlight fiscal risks and constitutional principles, but ultimately the legitimacy of electoral promises must be tested in the political arena, not adjudicated entirely in the courtroom,” he said.
While the law continues to grapple with these questions, the fiscal implications of welfare politics are becoming increasingly visible. Several states have significantly expanded subsidy regimes and direct benefit transfers in recent years.
Punjab provides one of the clearest examples of fiscal strain linked to welfare commitments. The state’s debt is nearly 45 per cent of Gross State Domestic Product, among the highest in the country. A significant portion of spending goes toward electricity subsidies, farm support and social transfers. Analysts warn that the state’s fiscal space for infrastructure and long-term development is narrowing.
Tamil Nadu’s financial position remains relatively stronger but it is also under pressure. Its debt ratio remains manageable yet is steadily rising. The state operates an extensive welfare network that includes subsidised food, public transport concessions, social assistance programmes and electricity subsidies. Supporters point to the state’s strong human development indicators as evidence that welfare and growth can coexist.
In Andhra Pradesh, successive governments have relied heavily on direct cash transfers and welfare payments. Analysts note that capital expenditure has declined as social spending has expanded. Telangana, once considered fiscally comfortable, has also witnessed a rise in debt levels, driven by irrigation projects, loan waivers and power subsidies.
West Bengal continues to carry one of the country’s highest debt burdens in absolute terms. Welfare schemes ranging from student assistance to cash transfers for women form a central pillar of its governance model.
Even relatively strong states are expanding welfare guarantees. Karnataka has introduced measures such as free bus travel for women and income support programmes aimed at improving household incomes. Supporters argue that such initiatives stimulate consumption and strengthen social protection.
Political leaders remain divided on the issue. Congress leader and Supreme Court intervenor Jaya Thakur defended welfare subsidies as a constitutional responsibility. “Ruling parties are duty-bound to frame policies for the welfare and uplift of the weaker section,” she said. “Subsidies are part of that responsibility and cannot be called freebies.”
Others caution that competitive populism may undermine fiscal discipline. Senior advocate Vijay Hansaria, appointed amicus curiae by the Supreme Court in the case, warned that escalating promises could have serious economic consequences. “If electoral politics descends into a competition of unsustainable giveaways, fiscal responsibility becomes the first casualty,” he told THE WEEK. “Public finance cannot be driven by short-term populism when the consequences are long-term debt and reduced developmental capacity.”
Hansaria has argued that fiscal populism creates a cycle in which governments incur debt to finance electoral promises while future administrations inherit the liabilities. Over time, such practices risk shifting the fiscal burden onto future generations.
Empirical studies show that welfare programmes can produce real social gains. Research has linked bicycle distribution schemes for schoolgirls in Bihar and West Bengal to reduced dropout rates. Subsidised bus travel for women in Tamil Nadu has improved workforce participation, while food security programmes continue to prevent extreme deprivation.
The challenge lies in distinguishing productive welfare investments from policies designed primarily to influence electoral outcomes. In India’s unequal economy, many voters do not see welfare benefits as political gifts but as legitimate claims on the state.
Political competition reinforces this cycle. Once one party introduces a subsidy, rivals feel compelled to match or exceed it. Programmes, once implemented, are rarely withdrawn. Borrowing fills the fiscal gap and the costs gradually accumulate.
Until the law provides clearer guidance on the balance between welfare obligations and fiscal responsibility, the price of promises will continue to be paid long after the applause at election rallies fades.