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On a sticky wicket
Chandrababu Naidu's reversion of his earlier stand on increasing power tariffs for farmers in Andhra Pradesh is entirely understandable in the context of the Lok Sabha elections, but it serves as a good example of the costs the country has to pay for the poll. Naidu has been one of the leaders in the forefront of liberalisation, and his advocacy for higher power tariffs and privatisation of power have been admirable. But the Andhra chief minister has been batting on a sticky wicket, and there have been reports that the withdrawal of the subsidised rice scheme and the repeal of prohibition may hurt the TDP's electoral prospects. The recent spate of suicides by cotton growers in the state have added to Naidu's worries. Obviously, these fears have been translated into a softer stand on populism.Naidu himself has said that the generation cost of old power stations is Rs 1.20 per unit, while that of new stations is Rs 2 per unit. At the current rate of 13 paise per unit charged to farmers, not even a fractionof the cost is being recovered. The World Bank has insisted that a minimum charge of 50 paise per unit should be levied on farmers, and the failure to raise the tariff may lead to the drying up of World Bank financing. The AP State Electricity Board's losses will mount, and fresh investments in power will be affected. All these consequences are well-known, and yet the political parties continue to indulge in competitive populism. If concern for the poor, instead of concern for vote banks, was really at the back of politicians' minds, we would long ago have started directly subsidising poor families instead of subsidising products. Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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