After indulging in competitive populism during the polls, Tamil Nadu CM Jayalalithaa has bitten the bullet and opted for good economics over bad politics.

AIADMK supremo J Jayalalithaa stormed to power with a bucketful of sops for voters – free laptops for students, free sewing machines, free fans, free mixies, free houses for BPL families – and more.

The Karunanidhi-led DMK government had promised many freebies too, but Jayalalithaa outdid their efforts. On counting day, the verdict was in: the AIADMK front won 203 seats; with Jayalalithaa’s party alone securing a simple majority with 150 seats – able to form the government without requiring the support of its partners.

With this super-victory, what would we see from Jayalalithaa? A continuance of the profligate spending and more sops to ‘ensure’ re-election – or getting down to the business of development?

Thankfully, and congratulations to her, Jayalalithaa’s chosen the road less travelled. “On Thursday, Chief Minister J Jayalalithaa spent more than one-third of her 20-minute televised address talking about the health of the Tamil Nadu Electricity Board (TNEB) and the inevitability of a power tariff hike… People who consume more than 500 units in two months will have to pay more. "The hike has to be substantial," said an official, "because the losses are huge." Sources told The Times of India that TNEB has proposed a hike of 1.50 per unit, which would bring in additional revenue of Rs 8,200 crore, but not quite enough to bridge the deficit of Rs 9,500 crore.”

That’s not the end of the story. “Chief Minister J Jayalalithaa announced a steep hike on Thursday in bus fares and milk price, besides indicating a substantial upward revision in power tariff. Starting Friday, Aavin milk will cost Rs 24 a litre, a hike of Rs 6.25, and the minimum bus fare in town will be Rs 3 instead of Rs 2. The maximum bus fare in Chennai will be Rs 14, not Rs 12, while the fare has increased from Rs 7 to Rs 12 in other towns,” says a Deccan Chronicle report.

The hikes in electricity tariffs, bus fares and milk come after a decade – with the result that related state government units suffer huge losses. To illustrate, the state-run Tamil Nadu Electricity Board had Rs 40,659 crore of accumulated losses as on 31 March 2011.

These are good steps – but only first steps. Tamil Nadu’s power problems will not end with the rise in revenues for TNEB, nor will the quality of the public transport with the hike in bus fares. The state’s citizens have been living a charmed life for the past 10 years, with the DMK government playing vote bank politics and freezing the prices of key consumables.

These price corrections – more appropriate than price hikes – so early in the new term should pave the way for Jayalalithaa to take more unpopular, but required, steps. The Kudankulam nuclear plant imbroglio is one that needs to be resolved, as the state reels under a power shortage.

Both the centre and state governments need to move away from politicking to arrive at a solution that is good for the state and citizens. The fiscal decisions taken by Jayalalithaa should be received warmly by the prime minister and the finance minister – as all news of states demonstrating fiscal prudence should.

The Congress party also needs to ensure that their UPA partner, the DMK, does not resort to making these necessary hikes a political issue. No signal could be more irresponsible than a silent Congress if the DMK does misbehave to counter responsible decisions of an elected government.