Election Freebies and the Crisis of Fiscal Federalism in India
An analysis of Article 282, the Subramaniam Balaji doctrine, and the pending challenge to poll-time populism
Author: Meenakshi Tripathi
College: SGT University
Course: BBA LLB, 2nd Year
TO THE POINT
Every election season in India now carries a familiar soundtrack: promises of free electricity, cash transfers to women, farm loan waivers, and free bus travel. Supporters call this welfare; critics call it ‘revadi culture’, a phrase that entered public debate after the Prime Minister used it in 2022 to describe indiscriminate poll-time giveaways. Beneath the political noise lies a genuine constitutional question: can courts or the Election Commission draw a line between a legitimate welfare scheme and a fiscally reckless bribe dressed up as a manifesto promise? This article examines that question through the lens of Article 282 of the Constitution, the Representation of the People Act, 1951, and the Supreme Court’s unresolved engagement with the issue since 2022.
USE OF LEGAL JARGON
A few recurring terms are central to this debate and are explained below for clarity:
● Fiscal Federalism – the division of taxing and spending powers between the Union and the States, and the financial relationship that keeps that division workable.
● Article 282 – the constitutional provision permitting the Union or a State to make grants for any ‘public purpose’, even outside its ordinary legislative competence.
● Corrupt Practice (Section 123, Representation of the People Act, 1951) – conduct during an election, such as bribery or undue influence, that can render an election void if proved against a candidate.
● Directive Principles of State Policy (Part IV, Constitution) – non-justiciable guidelines directing the State towards welfare goals, often invoked to justify redistributive schemes.
● Consolidated Fund / Exchequer – the account into which all government revenue is paid and from which all expenditure is drawn, subject to legislative appropriation.
● Model Code of Conduct (MCC) – a set of Election Commission guidelines governing party and candidate conduct once elections are announced, presently silent on freebie promises made before the MCC is notified.
● Populist Fiscal Policy – an economic term describing government spending driven by electoral incentives rather than long-term fiscal planning.
THE PROOF
The Reserve Bank of India’s annual study of State finances has repeatedly flagged that subsidy-heavy spending on power, transport, and cash transfers is compressing the capital expenditure of several States, since committed revenue expenditure leaves progressively less fiscal space for infrastructure and asset creation. The Comptroller and Auditor General has similarly red-flagged the growing debt-to-GSDP ratios of States that expanded subsidy outlays sharply after election cycles, with States such as Punjab frequently cited as cautionary examples of subsidy-led fiscal stress.
On the litigation side, the record shows sustained judicial concern without a final resolution. Advocate Ashwini Kumar Upadhyay’s writ petition, filed in January 2022, argued that unfunded freebie promises amount to bribery and undue influence under the Indian Penal Code and violate Articles 162, 266(3) and 282 of the Constitution by diverting public money away from any genuine ‘public purpose’. A Bench headed by the then Chief Justice, N.V. Ramana, observed that indiscriminate freebies could push a State towards a debt trap, and referred the matter to a three-judge Bench in August 2022 because the earlier Subramaniam Balaji ruling had been delivered by only two judges. The Election Commission, for its part, filed an affidavit declining to regulate manifesto promises, while the Aam Aadmi Party and other intervenors argued that free electricity and water are welfare essentials, not freebies. A fresh, related plea was issued notice by the Supreme Court in September 2024. As of date, the larger Bench reference remains pending, meaning the constitutional status of election freebies is still legally undetermined.
ABSTRACT
This article examines the tension between electoral welfare promises and fiscal discipline in Indian constitutional law. It situates the ongoing ‘freebies’ debate within the framework of Article 282, the Representation of the People Act, 1951, and the Directive Principles of State Policy, arguing that the absence of a statutory definition of ‘freebie’ has left the issue to be litigated piecemeal. Drawing on S. Subramaniam Balaji v. Government of Tamil Nadu (2013) and the pending three-judge Bench reference initiated in Ashwini Kumar Upadhyay v. Union of India, the article traces how the Supreme Court has been reluctant to strike down manifesto promises as ‘corrupt practices’ while simultaneously voicing concern about the fiscal sustainability of unchecked populism. It concludes that a workable solution likely requires a legislative or Election Commission framework for fiscal disclosure, rather than an outright judicial ban that could blur the line between welfare and populism.
CASE LAWS
1. S. Subramaniam Balaji v. Government of Tamil Nadu (2013) 9 SCC 659 – The appellant challenged a Tamil Nadu scheme distributing free colour television sets under an election manifesto promise, arguing it was an unauthorised drain on the State exchequer. The Supreme Court held that distribution of welfare schemes announced in an election manifesto does not, by itself, amount to a ‘corrupt practice’ under Section 123 of the Representation of the People Act, 1951, since a manifesto is released before the Model Code of Conduct is triggered. However, the Court directed the Election Commission to frame guidelines, in consultation with political parties, requiring manifestos to disclose how promised schemes would be financed. The Court also acknowledged that such welfare measures are linked to the Directive Principles, but cautioned that indiscriminate largesse from the public exchequer needed to be checked.
2. Ashwini Kumar Upadhyay v. Union of India, W.P. (C) No. 12 of 2022 – This pending petition seeks a direction restraining political parties from promising ‘irrational freebies’ from public funds, and asks the Court to treat such promises as bribery and undue influence under the Indian Penal Code, 1860, and as violative of Articles 162, 266(3) and 282 of the Constitution. A Bench headed by the then CJI observed that the unchecked distribution of freebies could push a State towards a debt trap, and referred the correctness of Subramaniam Balaji to a three-judge Bench, since the earlier ruling was rendered by only two judges. The matter, along with a related 2024 plea concerning cash promises as a ‘corrupt practice’ under the Representation of the People Act, remains pending final adjudication.
3. Kesavananda Bharati v. State of Kerala (1973) 4 SCC 225 – Although not a freebies case, this ruling was invoked in Subramaniam Balaji for the proposition that the Preamble’s commitment to Socialism forms part of the Constitution’s basic structure, lending indirect constitutional support to State welfare largesse as an expression of distributive justice, provided it is not so unchecked as to threaten the fiscal foundation the Constitution itself presupposes.
CONCLUSION
The freebies debate is less a contest between ‘good’ welfare and ‘bad’ populism than a gap in institutional design. The Representation of the People Act, 1951 was not drafted with fiscal sustainability in mind, and Article 282’s ‘public purpose’ requirement is broad enough to accommodate almost any State expenditure a legislature chooses to authorise. The Supreme Court in Subramaniam Balaji rightly declined to convert every welfare promise into an electoral offence, recognising that the line between a subsidy and a bribe is often a matter of degree and democratic choice rather than law. Yet its own observation, repeated in the pending Upadhyay litigation, that unchecked freebies could push States into a debt trap, shows the judiciary is unwilling to treat the issue as constitutionally irrelevant either. Until the three-judge Bench delivers a final ruling, the most realistic path forward lies not in a blanket judicial prohibition, which risks undermining legitimate welfare policy and federal autonomy in fiscal choices, but in a disclosure-based framework, requiring parties to cost their manifesto promises and states their funding source, so that voters, rather than courts, can judge the trade-off between welfare and fiscal prudence.
FAQ
Q1. Is promising free electricity or cash transfers illegal in India?
No. The Supreme Court in Subramaniam Balaji held that welfare promises in an election manifesto do not, by themselves, constitute a corrupt practice under the Representation of the People Act, 1951.
Q2. Has the Supreme Court banned freebies?
No final ruling exists. The matter was referred to a three-judge Bench in 2022 and remains pending; the Court has only made observations expressing concern about fiscal sustainability.
Q3. What is Article 282 and why does it matter here?
Article 282 allows the Union or a State to make grants for any ‘public purpose’ even outside its normal legislative field. Petitioners argue many freebie schemes fail this ‘public purpose’ test; the Court has not yet settled this question.
Q4. Can the Election Commission stop parties from promising freebies?
The ECI has so far declined to regulate manifesto content on its own, taking the position that this is a policy matter for Parliament or the courts, not for an unelected body to decide.
Q5. What is the difference between a ‘welfare scheme’ and a ‘freebie’ in this debate?
There is no statutory definition. In practice, the distinction is normative rather than legal; intervenors like political parties argue that free electricity or water is a welfare essential, while petitioners call the same schemes irrational giveaways, which is precisely why the issue keeps returning to the courts.
