The Greater Chennai Corporation hiked trade license fees affecting nearly 75,000 establishments in the city.
News Tamil Nadu

Dravidian Model’ Economic Reality: How DMK’s Rule Has Increased Living Costs In Tamil Nadu

February 12, 2025
The Commune

With the Erode by-elections behind us, the focus has now shifted to the Tamil Nadu general assembly elections later this year, creating a wave of anticipation. However, the DMK government, which currently holds power in the state, which came with pursuing anti-development policies, stirring anger against the previous AIADMK government for hike in commodity prices and taxation policies, the DMK’s financial approach, particularly its focus on freebies, has only led to an increase in government loans, further burdening the citizens.

The three years of Dravidian model governance have led to significant price hikes, impacting everyday expenses for the people of Tamil Nadu.

Milk Price Increase:

  • The price of one liter of Orange milk has gone up by ₹12.
  • For a small family of four, consuming one liter per day, the monthly cost increases by ₹360 (₹12 x 30 days).
  • Over the span of three years, this amounts to ₹2,960 (₹360 x 36 months).

Electricity Tariff Hike:

  • The old tariff for 500 units was ₹1,130, while the new tariff is ₹1,725.
  • This represents an increase of ₹595.
  • Over the course of three years, this adds up to ₹10,710 (₹595 x 6 times a year).

Property Tax Increase:

  • The property tax for a 600-square-foot house used to be ₹3,240, but it has now risen to ₹4,860.
  • Over three years, this increase totals ₹5,400.

Summary of Price Hikes:

  • Milk price hike: ₹12,960
  • Electricity tariff hike: ₹10,710
  • Property tax hike: ₹5,400

Total increase over three years: ₹28,530

In comparison, voters were offered ₹1,000 per vote in the election, totaling ₹4,000 for a family of four.

Net Loss:

  • ₹28,530 – ₹4,000 = ₹24,530
  • This means, over the course of three years, the people of Tamil Nadu have effectively lost ₹24,530 for each ₹1,000 they received in exchange for their vote.

It is notable that this calculation does not account for other price hikes, such as in cement, construction materials, rice, dal, cooking oil, drinking water tariffs, bond registration fees, and property guide value increases.

Let’s take a look at what has been hike in the past few years of Dravidian model rule.

Property Tax Hike

Previously in April 2022, the DMK government announced a property tax hike ranging from 25% to 150% across various corporations, municipalities, and panchayats. In Chennai, houses under 600 sq ft saw a 50% increase, those between 600-1200 sq ft saw a 75% rise, and houses between 1,201-1,800 sq ft experienced a 100% increase. Properties over 1,801 sq ft faced a 150% hike.

Water & Sewerage Charges Hike

In April 2023, Chennai Metrowater increased water and sewerage charges by 5% for residential and 10% for commercial consumers to address revenue-expenditure gaps. Residential charges rose from ₹80 to ₹84 per month, and commercial from ₹250 to ₹263. Metered connections started at ₹42 (up to 10 kl) from ₹40. Mobile water tanker fees also increased, with a 6-kl load costing ₹499, up from ₹475.

Electricity Tariff Hike

In July 2024, TANGEDCO increased the electricity tariff by 4.83% for all consumers in the state. Being a bi-monthly billing, this further burdens the end user.

Professional Tax Hike

People of the state have been burdened by the tax increases ever since the DMK government came to power. To add more salt to injury, the Chennai corporation passed a resolution to increase professional tax by 35%. This resolution was passed during the monthly council meeting of the Chennai Corporation, chaired by Mayor Priya on 30 July 2024. According to the Tamil Nadu Urban Local Bodies Act, 1998 Section 1/7 A-1 and the Tamil Nadu Urban Local Bodies Rules 2023 Sections 274-288, professional tax rates can be revised every five years, with an increase ranging from 25% to 35%. The last increase in Chennai was in 2018. The new resolution implements a 35% increase from the existing tabular amount.

 

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