Government Defends Tariff Revision

BENGALURU — The Karnataka government has firmly defended its decision to hike the price of the state's popular Nandini brand milk by Rs 8 per litre, asserting that the revision is vital to shield dairy farmers from mounting operational losses. State Chief Minister DK Shivakumar addressed the media on Thursday, explaining that the price adjustment—effective November 1—was reached after extensive consultations with stakeholders across the agricultural and cooperative sectors.

Under the newly structured pricing model, Rs 7 of the hike will go directly to farmers, while Re 1 will be allocated to the Karnataka Milk Federation (KMF) cooperatives. Shivakumar emphasized that the welfare of the agricultural community remains a paramount priority for the administration.

"The demand for a milk price hike has been active for the last couple of years. This adjustment was necessary to prevent severe losses to our farmers," Shivakumar stated during a press briefing in Bengaluru. "The government is actively supporting our agrarian base, and farmers are indispensable to us. If there are no farmers, how can we sustain our agricultural economy?"

Rising Input Costs and Regional Disparities

Explaining the economic drivers behind the decision, the Chief Minister pointed to compounding inflation in essential agricultural and supply chain inputs. Surging costs for plastic packaging materials, diesel, and petrol have drastically inflated transportation overheads for the dairy sector. According to Shivakumar, industry representatives had initially petitioned for a more aggressive price increase ranging between Rs 12 and Rs 15 per litre.

Furthermore, state officials cited regional price imbalances as a critical vulnerability. With milk prices in Karnataka historically lower than those in several neighbouring states, the state faced significant leakage through the commercial diversion of dairy supplies across borders into Andhra Pradesh and Maharashtra.

"People willingly pay Rs 30 to Rs 35 for a litre of bottled water. Compared to our neighbours, milk prices in our state remained artificially low, which threatened to route our supplies elsewhere," Shivakumar noted. He also highlighted the nationwide reputation of the Nandini brand, noting high external demand—including bulk procurement of Nandini ghee by institutions like Tirupati for traditional sweets.

Political Consensus and Transport Fare Warning

Addressing consumer concerns regarding the added financial burden, the Chief Minister maintained that the administration had to balance affordability with the economic survival of rural producers. He revealed that legislators across party lines had universally demanded the price increase in both Houses of the state legislature, though formal action had been delayed due to intervening legislative council elections.

In addition to the dairy sector adjustments, Shivakumar delivered a stern indicator regarding the financial health of the state's public transport corporations. Pointing to heavy operational losses and depleted reserves—exacerbated by the implementation of free bus travel schemes for women—he warned that state transport bodies may soon be forced to independently review and potentially hike bus fares to maintain basic operations.

"The Transport Department has suffered heavy financial strain, to the point where securing funds for daily diesel purchases became a challenge," Shivakumar said. "Because the government provides free travel for women commuters, the transport corporations themselves have been authorized to evaluate and decide on fare adjustments moving forward."