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Last Updated : Sep 20, 2013 10:51 PM IST | Source: CNBC-TV18

Are Amma‘s populist measures taking a toll on exchequer?

Tamil Nadu chief minister J Jayalalithaa has been rolling out populist measures such as low-cost canteens and mineral water, ahead of the elections.

From ‘Amma Canteens’ to ‘Amma Mineral Water’, chief minister J Jayalalithaa has been rolling out populist scheme one after another as elections approach. But the Tamil Nadu government has justified the move by saying that it helps the common man against rising inflation. Also, the government claims that these schemes are not taking a heavy toll on the state exchequer, report CNBC-TV18’s Poornima Murali and Archana Shukla.

Tamil Nadu Govt taking a hit?

Piping hot Idli for breakfast for Re 1 each; Sambhar rice for Rs 5-- courtesy 200 Amma Canteens across Chennai. At these cheap rates, for each Idli, the Chennai Corporation incurs a loss of 86 paise, and a loss of Rs 5 for each plate of Sambhar rice. The state government, though, is not worried. It states that this scheme is not leading to extra losses. It now plans to expand the number of canteens to a 1000

''We would have spent about Rs 5-6 lakh per canteen. The income in the past eight months has crossed Rs 15 crore. More expansion is going to be cost effective. Even the little money we spend, will be compensated. No loss-no gain factor is successful”, says P Kuganantham, city health officer, Chennai Corporation.

'Amma' water: win-win for all

But, with food inflation stubbornly high, can the state government sustain this "no loss" claim? Well, here's where the Govt-run 31 farm fresh veggie outlets in the city chip in to support the government’s ‘no-loss’ claim. Vegetable is sourced directly from farmers directly and sold at prices upto forty percent lesser than market prices.

T Ramakrishnan, political analyst says, “Fresh farm vegetable outlet is a no profit- no loss basis. It is a part of the price control measures. They are incurring very incremental expenditure as they make use of the existing infrastructure.”

Low-cost mineral water scheme

The success of these schemes has led the Amma Govt to launch more of them. The latest addition is "Amma mineral water"; at just Rs 10 a litre for commuters at bus stations and long distance buses.

The mineral water scheme is being implemented by the Transport Department under its budget, while the Amma Canteen comes under the Chennai Corporation and the farm fresh outlets come under the Horticulture Dept.

The state government also says higher tax compliance is also helping them strike a balance between investments and revenue.

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First Published on Sep 20, 2013 10:25 pm
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