Bus fare, power tariff hiked

By Our Tamil Nadu Bureau

CHENNAI, NOV. 28. In a major effort at dealing with the financial crisis, the Tamil Nadu Government today announced an increase in bus fares and power tariff, besides pruning the food subsidy, to put its economy and fiscal health back on track.

The Government announced a series of both revenue-raising and austerity measures which could result in a saving of about Rs. 1700 crores and yield an additional revenue of over Rs. 2000 crores in a full year, according to preliminary estimates.

In the entire exercise, it is also clear, the State is falling in line with the World Bank and the Government of India's reforms and restructuring.

An official press communique said, ``The Government may commit itself to the Government of India and international financial agencies on holistic fiscal and sectoral reforms, including the power, transport and food sectors''.

Today's broad sweep covered an across-the-board increase in bus fare, minor changes in the motor vehicles tax regime, ``rationalisation'' of electricity rates, restructuring of the transport corporations, targeting of the poor in the Public Distribution System and reforms in government hospitals as well as medical education. On top of it, the Government authorised the district cooperative milk producers unions and the Tamil Nadu Cooperative Milk Producers Federation to increase the procurement and sale price of milk.

Simultaneously, the Government decided to implement uniform floor rates and other taxation measures. Accordingly a floor rate of 4 per cent will be levied on edible oil, cotton hosiery goods and computer software. The sales tax on urea is being raised from 2 to 4 per cent. Apart from this, sales tax on Indian-made Foreign Liquor is being increased from 50 to 55 per cent. An entry tax is being levied on diesel, furnace oil, Low Sulphur Heavy Stock and cement.

All these proposals will take effect from December 1. Official sources said the government notifications and orders were being issued today itself.

The Government has also decided to introduce an `on-line lottery system', for raising about Rs. 100 crores to 150 crores.

The 19 State transport corporations are being restructured into seven corporations to reduce expenditure. To offset the huge accumulated losses of Rs. 2035 crores, the bus fare in metropolitan and other towns will be revised to a minimum of Rs. 2 and a maximum of Rs. 10. The rates for mofussil, ghat sections and express buses have also been revised. For ordinary services, the rate goes up from 22 to 30 paise per km.

It has been decided, in principle, to operate private buses in a phased manner in all districts, including Chennai.

On the power front, the Government has revised the maximum demand charges for high tension consumers and rationalised the tariff. For domestic consumers, the minimum will go up from 75 paise per unit to Re. 1 and the maximum from Rs. 3.05 to 4.50 per unit. In a full year, this revision is expected to mop up nearly Rs. 1,500 crores.

A differential pricing system will be adopted for the PDS The retail price for rice for those below the poverty line will remain at Rs. 3.50 per kg, but those above the poverty line will have to pay Rs. 9. The subsidy on food could drop from Rs. 1540 crores to Rs. 600 crores.

The AIADMK general secretary, Ms. Jayalalithaa, described these steps as a ``bitter medicine'' to restore the economy to its `original health'.

Send this article to Friends by E-Mail

Section  : Southern States
Previous : Mediapersons stage demonstration
Next     : Resource mobilisation key component