By Sampath Kumar BBC correspondent in Madras

Analysts say the measures have been taken ahead of state elections in two years time

The move comes after her party, the All India Anna Dravida Munnetra Kazakham (AIADMK) suffered a huge defeat in recent national elections.

The policies axed by Jayalalitha include a controversial ban on religious conversions.

The one year old law is strongly opposed by religious minorities.

Voters 'alienated'

It gave the authorities the power to impose penalties and jail terms for those involved in religious conversions through "coercion" or the offer of money and other benefits.

The law was strongly opposed by Christians, Muslims and low caste Hindus as an attempt to curb freedom of religious practise.

Political observers say this step may have brought the AIADMK closer to the Bharatiya Janata Party - the main constituent in the governing coalition - but alienated many Muslims and Christians opposed to the anti-conversion law.

In last week's parliamentary elections, the AIADMK-BJP alliance could not win even one of the 40 seats in Tamil Nadu and Pondicherry and lost heavily to a powerful alliance comprising the regional Dravida Munnetra Kazakham (DMK) party and the Congress party.

Along with lifting the ban on conversions, Jayalalitha also restored free electricity supplies to farmers.

Stringent punishments handed down to government employees who went on strike in April have also been cancelled, and the income ceiling required to receive food grains at subsidized prices has been removed.