Known for his populist measures that have created an environmental havoc in his state, YSR’s tactics is similar to one adopted by TN Chief Minister M. Karunanidhi (MK). The tactic is to divert plan funds under the control of the state to finance populist unplanned programs and then go to the Federal Government with a begging bowl for a bail out. Unlike YSR, MK, as an influential partner of the minority United Progressive Alliance (UPA) government, has a strategic advantage where he can bring it down if his demands are not met. By holding the federal government hostage, MK can keep doling out populist largesse and have his programs financed by the federal government at the cost of overall development.
YSR also has another major limitation. Recently, in order to fix an inconvenient vernacular media baron, he volunteered to return several hundred acres of land that he has illegally held way above the limits set by the state law. The opposition and the erstwhile allies of the Telangana Rashtriya Samithi (TRS) are now demanding YSR’s resignation. Hence, if YSR were to increase the electricity rates, his popularity will plummet even more and that is a risk he is not willing to take.
What may be interesting to see is how the economically savvy Prime Minister will handle this move when he had given explicit guidance to states not to politicize electricity by providing it free or at an exorbitantly subsidized rate. What remains a question is whether YSR’s policy is a permanent tactic (which is clearly unsustainable) or a temporary measure to tide over the shortfall.