Hiking tariffs where populism reigns

In a State where essential commodities are either free or heavily subsidised, sound economics often takes a backseat: experts

January 24, 2018 01:05 am | Updated June 13, 2021 07:03 pm IST - CHENNAI

Students of Government Law College, Vellore stage a road roko near Katpadi to show their opposition to the hike in bus fare on Tuesday.

Students of Government Law College, Vellore stage a road roko near Katpadi to show their opposition to the hike in bus fare on Tuesday.

The recent bus fare hike, which has evoked strong reactions from different sections of society, has again triggered the debate on whether “rational and hard” decisions on matters of public importance can be enforced without attracting flak from the people.

Even though any move to hike the tariff for any service will, in any State, be criticised initially, the situation in Tamil Nadu is qualitatively different from others in view of the practice of “politics of competitive populism.”

The distribution of lakhs and lakhs of free colour television sets by the Dravida Munnetra Kazhagam (DMK) regime of 2006-2011 was followed by another round of distribution of equal numbers of electric fans, mixies and wet grinders during the All India Anna Dravida Munnetra Kazhagam (AIADMK) government of 2011-2016. Under such circumstances, the political executive of the day, over the years, had not viewed kindly any proposal on tariff increase with regard to water, electricity or public transport, even though it was conscious of the inherent need for such a move. This had only resulted in the postponement of decisions on such matters, which had to be taken only when they became inevitable. A classic example is the present bus fare hike, considering that the previous revision was effected in November 2011.

Facing elections

“Tamil Nadu should be the only place where consumer goods are given free of cost to people in the name of welfarism,” comments S. Subramaniam, chartered accountant, adding that there is nothing wrong in providing, at concessional rates, “commodities of vital necessity.”

Former Chief Minister Jayalalithaa, in her last spell between 2011 and 2016, told her colleagues more than once that it was she who, as the AIADMK’s chief, had “to face three general elections [two Assembly elections and one Lok Sabha polls] in five years.”

While this held true for her principal adversary M. Karunanidhi too, the message that she delivered to her Ministers was that there was no option other than the “policies of populism.”

While criticising the government for a “sharp hike” in bus fares, M.G. Devesahayam, former civil servant, says considerations of electoral politics should never be allowed to influence the government’s decisions on matters concerning State transport corporations, which all constitute a “public good.”

There can be a “slow and steady increase” but not like the one that the government has done, he emphasises.

K. R. Shanmugam, Director, Madras School of Economics, feels that it would be a sound practice for the government to adjust all user charges to the level of inflation.

Need for subsidies

The ruling party’s spokesperson and former Minister C. Ponnaiyan, who held the subject of Finance during 2001-06 as also Transport between 1977 and 1980, dismisses the contention that “the implementation of populist measures” comes in the way of efficient governance.

“If that is so, do you think that this government would have taken such a decision?” he asserts, complaining that agitations on the bus fare hike are being “orchestrated” by the Opposition, especially the DMK and the Communist Party of India (Marxist).

R. Thangathurai, a chronicler of Tamil Nadu’s history, adds that the fare hike disproves the criticism against the government of having neglected governance.

The debate also touches upon the issue of relevance of subsidies.

G. Ramakrishnan, secretary of the State unit of the CPI (M), says that in an environment conditioned by neo-liberal economic policies, the government’s continuance of heavy subsidies has become imperative in the areas of education, public distribution system, electricity, health and public transport.

However, “such an approach need not be adopted with regard to non-essential services.”

K. Balu, spokesperson of the Pattali Makkal Katchi (PMK), says his party is for the government’s continued support in fields that will have long term impact such as the farm sector.

But, there is no place for policies only with an eye on “vote bank politics,” which is what, according to him, has been practised by the AIADMK and the DMK.

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