Price hikes to make TN eligible for fresh loans

Our Economic Bureau

Chennai, Dec 3: The recent bus fare and electricity tariff hikes and price revision of commodities under public distribution system and fiscal reforms initiated by the state government are expected to fetch Rs 3,070 crore in this fiscal. This increase in revenue would make the state eligible for loans from the Reserve Bank of India, World Bank (WB) and Asian Development Bank (ADB), chief minister O Pannerselvam and finance minister C Ponnaiyan told newsmen here on Monday.

The state government has approached the WB and ADB for Rs 18,000 crore credit for investment in wasteland development, rain water harvesting, self-employment schemes, sanitation and safe drinking water facilities in villages, etc.

The Union government has fixed guarantee limit of 80 per cent of the revenue collections in the previous years for loans and has pegged it at Rs 12,338 crore. Tamil Nadu has already crossed the statutory limit and has touched 86.87 per cent mark. For any fresh loan, the gap has to be filled and the price hike would enable the government to put back the finances on development track, the finance minister said.

The chief minister said even after the hike, the bus fare and electricity tariff were lower than those prevailing in other states. The government would consider categorisation of farmers for power supply according to income, he added.

According to the finance minister, the state suffered Rs 3,000 crore loss due to free power supply to farmers. “The line losses, power theft and other losses were dumped as free power supply to farmers,” Mr Ponnaiyan said, adding the government is planning trifurcation of Tamil Nadu Electricity Board into generation, transmission and distribution companies.