After an uncertain start Tamil Nadu Chief Minister E K Palaniswami has consolidated his leadership position. The success of the Global Investors Meet in 2019 and his recent trips to Britain, USA and Dubai, interacting with Tamil NRIs are welcome initiatives to attract investments. The state took bold reforms in education, public health and in sharpening the development thrust. Its healthy 8.17 per cent growth and the smooth conduct of the Modi-Xi summit showcased EKP’s grip over the administration. Approachability, willingness to listen and work in unison with party leaders, cabinet colleagues and the bureaucrats and maintaining cordial relations with the Centre, are among his forte. The AIADMK’s winning both the seats in the recent by-elections with comfortable margins is another testimony to his leadership.
The decision of the Palaniswami government of Tamil Nadu to celebrate 1 November as the Foundation Day of the state is welcome. This would provide the opportunity to showcase the achievements of the state in different fields as also to take stock of the tasks ahead.
For 50 years from 1967, the state had charismatic leaders from the film industry who commanded wide following and adulation. They did not feel the necessity to showcase their achievements from time-to-time except for those related to Tamil culture or literature. They had also been reluctant to travel outside to interact with the Tamil diaspora nor to solicit investments from outside the state. Their stature as mass leaders appeared a deterrent to step down and interact with leaders in different fields.
In 1991, the economy was liberalized and states had enormous leeway for showcasing their strengths to attract investments. Gujarat under Narendra Modi and Chandrababu Naidu in the undivided Andhra Pradesh, among few other chief ministers, made the best use of this right of the states. The biennial Vibrant Gujarat Global Investors’ Summit grew continuously in stature aiding Narendra Modi growing tall to evolve as a national leader.
Well-structured attempts to attract investments
Other states emulated this successful exercise and started organising regular investor meets. Tamil Nadu commenced this exercise with the first Global Investors’ Meet in 2015. Then Chief Minister Jayalalithaa set apart Rs 100 crore for conducting this. Ministers and senior bureaucrats visited global metros to meet with prospective investors. The event attracted widespread attention from across the globe. Around Rs 240,000 crore of investments were committed.
The next couple of years were traumatic. The state suffered unprecedented rains flooding the Chennai metro in December 2015 and was also devastated by the Vardah cyclone in 2016. There was prolonged hospitalisation of Chief Minister J Jayalalithaa with the consequent split of the AIADMK party after her demise.
There were constant threats of the ruling party losing its majority in the legislative assembly and of the government’s fall. It should go to the credit of the party duo – E K Palaniswami and O Panneerselvam – to have successfully managed to keep the flock together and stabilise the government in power. Frequent elections did distract attention from governance. The threat of stability also encouraged parties in opposition to indulge infrequent and widespread agitations. The state earned the opprobrium of its emerging as the agitation state of India with the largest number of disruptions.
Yet the leadership, supported by a strong civil administration, has been successfully steering the state through these with credit. The second Global Investors’ Meet organised in January 2019 was again effectively used to showcase the very considerable attractions of the state for investments. Commitments of Rs 300,000 crore of investments
An interesting part of the evolution is Chief Minister EKP gaining in stature. His hold over the cabinet appears firm and several of the ministers, working in tandem with the civil service, have been performing well. Unlike the earlier decades, one witnesses a greater degree of freedom and initiative enjoyed by the ministers and civil servants.
Welcome initiative to woo the Tamil NRIs
A welcome initiative of the Chief Minister related to his undertaking a tour of UK, USA and Dubai along with some of his cabinet colleagues and senior bureaucrats. IE has been suggesting the importance of such visits that would help in the familiarisation of the state-of-the-art technologies, infrastructure and industrial practices in other countries. Tamil Nadu also has a large, prosperous Tamil diaspora spread across the globe. In my travels abroad, I have observed a certain sense of alienation and neglect felt by these prosperous Tamils. The rapport established by Chief Minster Palaniswami with sections of these is thus welcome. In opening up the lines of contact, one can expect the state to draw on the rich resources of these prosperous non-resident Tamils in turn of investments, technical and managerial expertise…
The visits provided the opportunity to appraise both the Indian diaspora and prospective investors, of the very considerable strengths and attractions of Tamil Nadu.
Industry Minister M C Sampath said a special division, Yaadhum Oorey, would be set up in the TN Guidance Bureau and members of the diaspora would be state’s brand ambassadors to get investment commitments.
The Palaniswami government has taken several initiatives like the Kudimaramathu. A large, tanks number of lakes, tanks and other water resources have been desalted. It is worth adopting the successful model of Gujarat in constructing check dams across rivers to store and conserve water.
The Gujarat government under Modi ensured water supply to all its 18,000 odd villages. This helped the state ensure not just drinking water, but also achieve spectacular growth in the production of cotton and groundnut.
Draw the potential of natural gas
Tamil Nadu was the earliest state to take electricity to all villages almost five decades ago. Yet the state suffered widespread power shortages and poor quality of power distributed until 2012. The situation has improved dramatically since; there are little interruptions and the quality of supply has improved. The state has emerged a leader in wind power and solar energy as also in encouraging cogeneration. With the recent installation of the facility at Ennore to import compressed natural gas, the potential to use gas as fuel and feedstock for a variety of industries should be quickly exploited. Natural gas is economical, elegant and environment-friendly. The state, far removed from coal fields, should help industry switch to CNG in a quick time. The earlier agitations against laying gas pipelines have denied the benefit of using gas to large sections of the population. The Palaniswami government should set up a high-power committee to get the best out of the use of gas in a quick time.
Cordial relations with neighbouring states
EPS also deserves compliment for meeting the chief minister of neighbouring Kerala to attempt to resolve the long-pending Mullai-Periyar dam issue. Water is vital, but there is a lot to be achieved by adopting a policy of give and take. IE has been suggesting for long regular meetings amongst the chief ministers of the southern states to look at the prospects for coordinated development of the region. Such meetings would also help resolve interstate disputes in water sharing. Such meetings would also help adopt the beneficial initiatives and polices of one another.
The state doesn’t have large natural resources like minerals except lignite. The Neyveli Lignite Corporation (NLC) has been a major source of power right from the 1960s. NLC has been amongst the highly profitable public sector units. In the initial years, NLC was also a producer of fertiliser based on lignite. With coal gasification technology now quite advanced, the viability of producing fertilisers and a vast range of chemicals could be revisited. B Santhanam, Head of Saint-Gobain Glass, refers to high-quality clay available in the massive quantities of overburden removed. The state can examine closely the pro-fitable manner of using this precious material.
Land acquisition for lignite mining has been a problem for decades. Developed countries have resolved this through a time-bound process of re-industrialisation. In a visit to Rheinbraun mines in Germany three decades ago, I noticed a brilliant practice: the mining licence was issued for a limited period and the licensees were required to return the land in the original form after taking out the lignite. Surely, with proper planning this could be done and large tracts of land could be restored after mining to their near original condition. This would address land acquisition issues better.
The Chief Minister should also attempt to involve the state more closely with the large public sector undertakings of the state like ICF, BHEL, NLC… These have been providing employment to thousands apart from enhancing skills and tax revenues. There are dozens of other service organisations like public sector banks, insurance companies… A close involvement with these would help.
Agglomerate the small landholdings, permitting lease over 15 years
In the agricultural sector the state’s performance has been uneven. A major reason is the highly-fragmented landholdings that average two acres. In most cases these are not contiguous. Thus, the application of science, technology and modern management is difficult. At a two-acre farm with low productivity, viability is lost. The need is a large increase in productivity. The state has been focusing on tackling this issue by the formation of Farmer Producer Organisations (FPOs), 400 farm clusters, around 600 custom hiring centres for farm machinery have been established. But these are too small to make large impact.
Since the numbers dependant on agriculture are large, political parties instantly support the demand for higher support prices. This is just a palliative and doesn’t solve the problem. A more lasting solution will be the agglomeration of landholdings without alienating ownership to viable sizes. This will call for permitting lease of land over 15 years and more. This will attract private corporates, individuals and other organisations to agriculture and infuse the much needed science and technology, mechanisation and management. Several other states have already amended the Agricultural Produce Market Committees Act permitting this.
The sugar industry, sustained by the patronage of state’s political leaders, is today in distress. From a peak production of 25 lakh tonnes, the state’s sugar production has fallen to just 7 lakh tonnes and several companies like Thiru Arooran Sugars, Dharani Sugars and even the century-old Parry Sugars are in distress.
In the post-green revolution era, the state’s record in rice production has been fluctuating. Over 50 years the average annual production of food grains increased just from a level of 60 lakh tonnes to 100 lakh tonnes; the average annual growth was less than 1 per cent. But the state has recorded handsome growth in productivity and production of a wide range of fruits and vegetables.
The government should think seriously of focusing on a few crops most suited to its agro-climatic conditions. As early as in 1980s, IE suggested the state phasing out the production of water-intensive crops like rice and sugar.
Rich content of social welfare
The state has earned the reputation for its record in social welfare schemes. Successive governments of the state have been expanding the content of social welfare. The mid-day meal scheme for school children, the elderly and the destitute; supply of free rice under the universal PDS; and the Amma Canteens to provide highly subsidised meals proved to be invaluable in lifting lakhs from abject poverty. These have also formed the models for adaptation by other states.
Healthcare through state insurance
The focus on child and women welfare is highly popular. Liberal allocations under the family welfare schemes and maternity benefits have contributed to a steep fall in maternal and infant mortality rates. The state is among the most advanced states in its healthcare initiatives. The population per doctor is the highest amongst the states, thanks to the continuous expansion of medical education. Recently the state has been allotted six more medical colleges to be set up in the districts. The TN Chief Minister’s Comprehensive Health Insurance Scheme has been rendering liberal benefits of surgery to close to 40 per cent of the population. The work done by the state government in cooperation with insurance companies has proved to be highly beneficial in providing the poor and the needy expensive surgeries. Like the mid-day meal scheme for school children, this also should have provided the inspiration for the Centre for launching the ambitious Ayushman Bharat.
New initiatives in primary education
There are welcome new initiatives in the field of primary education. Minister K A Sengottaiyan has helped embark on an extensive revision of syllabus in school textbooks after long years of neglect. Compressed over three years, this has helped upgrade curriculum to current requirements. After initial doubts, the state fell in line with the upgradation of syllabus on higher education crafted by the Centre. The NEET has been a help in improving the quality and preparedness for medical education. Offering free coaching, the state has been faring well in winning medical seats for its students. A similar revamping of the curriculum for engineering education would also follow with the Centre’s initiatives to streamline and introduce NEET-type common entrance examinations for engineering also.
The state has well-spread, strong infrastructure. Unlike in larger states like Maharashtra or West Bengal, development is well spread across the state. There appears an urban-rural continuum evidenced by the much larger number of corporations for local administration, airports, seaports… Of the 100 cities selected under the Smart Cities programme across the country, 11 are in Tamil Nadu. The state has four international airports and three large seaports. The road infrastructure is well utilised by over 23,000 buses run by the state transport corporations.
The reputation of the state bureaucracy to access funds from across the globe for large infrastructure
projects and in executing these has won the appreciation of the lenders. The state accesses such funds from multilateral and bilateral lenders like World Bank/IMF, ADB, KfW, JICA….
The state is also surplus in power. Though hydel capacity is small, large capacities have been installed in thermal, both coal and nuclear, wind and solar capacities. In recent years, there is increase in focus on transmission and distribution. Dr Bhaskar Ramamurthi, Director, IIT-M, held that rooftop solar capacity can meet bulk of the requirements of agriculture and domestic consumers. The state started well in encouraging rooftop solar. Yet the progress has been halting due to the difficulty in providing the net metering facility. There is need to place this in a mission mode on the lines Jayalalithaa implemented rain water harvesting in the early 2000s.
Handsome economic growth…
The massive focus of the state on welfare results in revenue and fiscal deficits in successive annual budgets. For the 2019-20 budget, total revenues were estimated at Rs 197,721 crore. Against this, revenue expenditure is estimated at Rs 212,036 crore. The large expenditure on salaries and pensions to government employees (Rs 96,110 crore), subsidies and transfers (Rs 82,673 crore) and interest payments (Rs 33,226 crore) contribute to this. There is thus little left for developmental expenditure. The ability of the state to borrow and service large funds takes care of infrastructure development.
Public debt has been registering steep increases. During the decade, this has registered a near four-fold increase from around Rs 100,000 crore to an estimated Rs 400,000 crore by March 2020. But related to the continuous and steep increase in the state’s GDP, this forms just around 23 per cent of GSDP.
For 2018-19, the GSDP of the state is estimated at Rs 12,07,526 crore and per capita GSDP at Rs 156,041 crore. With the overall growth rate of 8.17 per cent, the state is well ahead of other states.
The auspices for celebrating the Tamil Nadu Day on 1 November appears sound and propitious.