Tamil Nadu Chief Minister C Joseph Vijay announced a ₹3 per litre increase in Aavin milk procurement prices, raising the rate from ₹41 to ₹44 per litre to provide crucial relief to dairy farmers across the state. According to reports from Business Standard, this marks the second hike in milk procurement prices this month, following an earlier increase announced on August 19 that had raised the price from ₹38 to ₹41 per litre. The decision addresses dairy farmers' growing concerns over rising cattle feed costs and maintenance expenses, with the government now compensating Aavin for the additional amount to ensure the price increase reaches farmers effectively. Speaking in the Assembly, the Chief Minister explained that as input costs and the price of fodder had increased, the government had decided to further increase the procurement price by ₹3 per litre. The latest revision takes the total increase announced by the state to ₹6 per litre.
The milk procurement price increase will result in an additional financial outlay of ₹60 crore monthly for the state government, translating to an annual expenditure of ₹720 crore. As reported by Business Standard, this substantial financial commitment demonstrates the government's commitment to supporting the dairy sector and rural economy. The hike aims to provide immediate relief to dairy farmers who have been facing increased operational costs, with the government now directly compensating Aavin for the additional procurement price to ensure farmers receive the full benefit of the price increase. The milk procurement measure is expected to benefit more than 3.16 lakh milk producers across the state, with the government also increasing the incentive provided to milk producers from ₹3 per litre to ₹5 per litre to further support the dairy farming community.
While farmers receive the procurement price when selling to dairy cooperatives, consumers pay retail prices for packaged or loose milk. As reported by Goodreturns, a rise in farmer payments does not necessarily result in immediate retail price increases, as governments and dairy cooperatives can absorb part of the additional cost. However, if procurement and operating expenses remain elevated for a prolonged period, there could eventually be pressure on consumer prices. Businesses that depend heavily on milk and dairy products, including sweet shops, bakeries, restaurants, tea stalls and other food businesses, may eventually face higher operating costs. This creates a difficult balancing act for policymakers, as farmers need reasonable prices to sustain their businesses while milk must remain affordable as a daily household requirement.
Beyond agricultural support, CM Vijay unveiled a multi-crore infrastructure push spanning power, semiconductors, and logistics across the state. According to Business Standard, ₹33,066 crore has been earmarked for the Tamil Nadu Transmission Improvement Scheme to establish 196 new substations and lay 15,000 km of power lines. Additionally, a 1,600 MW Super Critical Thermal Power Station will be set up in Tuticorin through Public-Private Partnership model, involving an investment of ₹20,800 crore. For urban infrastructure development, the CM announced that Chennai's distribution network will receive upgrades worth ₹1,762 crore to address flood resilience and high load demands, with a new electricity corridor being set up to tackle power cuts in Chennai. The government has also announced ₹351 crore for increasing student admission capacity in government medical colleges in the healthcare and medical education sector.
