Given Tamil Nadu's precarious fiscal situation, the upward revision in bus fares, milk prices, and power tariff announced by Chief Minister Jayalalithaa seemed to have an air of inevitability about it. The power generation and distribution corporation, the State transport undertakings, and the cooperative milk producers' federation, and also other State public sector institutions, were facing mounting losses. Tamil Nadu's debts had crossed Rs.100,000 crore, and the government was finding it difficult to fund welfare schemes and initiate infrastructure projects. But while the rationale for the revision is clear, this cannot be of much solace to the poorer sections, who are reeling under the effects of food inflation and rising costs of living. The increases are steep, in some cases as high as 50 per cent. They should have been done more sensitively, more selectively, and in stages. That would have been easier for people to accept and to bear. The hike in milk prices, from Rs.17.75 to Rs.24 a litre, is bound to have an adverse impact on the nutritional levels of children in poor households. This 35 per cent hike, on top of an increase two years ago by the predecessor DMK government, is indefensible, especially considering that only less than one-third of the increase will go to the milk producers.
A good part of the blame for the difficult situation must be borne by the United Progressive Alliance government, whose efforts at controlling food inflation have been feeble and ineffective. Frequent increases in fuel prices have worsened the situation for the vulnerable sections. And as Chief Minister Jayalalithaa pointed out, the centre was hesitant to come to the aid of Tamil Nadu despite her repeated appeals for help. Not for the first time, a Congress-led central government has been shown up to be politically partisan. While States ruled by the constituents of the UPA such as West Bengal have got special financial packages, Tamil Nadu was, in Ms Jayalalithaa's words, “shown a step-motherly attitude.” What is of some relief is that the price hikes have come after the State kick-started several social benefit schemes such as free mixers and grinders and fans, and free laptops to school and college students in government and aided institutions. Crucially, Tamil Nadu remains the only State with a universal and efficient Public Distribution System that provides free rice to all eligible cardholders. But the government cannot give with one hand and take away with the other. A partial rollback of the increases will be in order.
