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Tamil Nadu loses, Delhi gains

For decades in the past, the headquarters of the Finance Ministry at North Block used to be described as the Anna Salai Corridor (source: KP Geethakrishnan). It had seen several brilliant Tamil officers: G Ramachandran, V Ramachandran, Ganapathy, S Venkitaramanan, KP Geethakrishnan, MR Sivaraman, K Venkatesan, C Ramachandran, R Gopalan, Arun Ramanatha… Shaktikanta Das… Especially during the tenure of Dr. Manmohan Singh as Finance Minister, Anna Salai was best represented in the ministry. This thinned down in recent years. Of course, we did have Shaktikanta Das as the most vocal spokesperson of the government on the crucial demonetization and GST intro phases.

The appointment of TV Somanathan (TVS) as the expenditure secretary in the Finance Ministry and promotion of another Tamil Nadu cadre IAS officer, K Rajaraman, as Additional Secretary, would witness the return of more TN cadre officials to North Block.

TV Somanathan and S Krishnan (recently promoted as Additional Chief Secretary, Finance, Tamil Nadu) have added lustre to the TN administration in recent years. Their tenure also coincided with the shift in the political leadership from dominant, all-powerful leaders like M Karunanidhi, MGR and J Jayalalithaa. This change lent for a lot more freedom for the civil servants who well-articulated the policies and programmes of the government. This was best seen in the focus on development, especially infrastructure. The Chennai Metro Rail is the best example of this. It has been racing ahead, refining the operations and services by the day, and also getting the clearance for a couple of more corridors linking the extended parts of Chennai metro.

I remember the brilliant address of Somanathan at the IE golden jubilee seminars on India 2030; in particular, the banter among the participants, MS Ahluwalia, TV Somanathan and R Seshasayee. His address at the ICT Academy on CSR was another brilliant one on the evolution and implementation of the concept of CSR.

Deeply religious and highly accomplished, TVS’ shift to North Block and his reputation as an able administrator would be timely in strengthening the finance ministry at the present juncture of economy in slow motion.

Expanding horizons for TN policymakers

Jayalalithaa as Chief Minister, announced conducting the first Global Investors’ Meet and allotted Rs 100 crore. Importantly, GIM 2015 provided the opportunity for policymakers to visit important global metros to present the attractions of Tamil Nadu and invite participation by prospective investors. The first meet held in September 2015 brought in commitments of investments to the tune of Rs 240,000 crore.

GIM 2019 helped more policymakers, including ministers, to conduct roadshows in India and abroad. Senior bureaucrats presented the salient features of the state’s strengths for investments. The meet attracted investments of over Rs 300,000 crore.

I am happy to notice the thrust on investments continuing. TN Guidance Bureau, headed by a strong board of directors, recently presented a report to Chief Minister EK Palaniswami to announce several new schemes on the ease of doing business. There were quite a few MoUs signed on fresh investments. Senior officials have been visiting countries in Europe, the USA, China, and South Korea. The exposure to state-of-the-art technologies and practices is precious and invaluable in adapting these by the state.

Other states like Maharashtra, Gujarat, and Karnataka have been known for long for such initiatives. Happily, though late, Tamil Nadu is presently active in this area. The state has so much to attract and advertise!

Vendetta politics? Jagan Reddy emulates Jayalalithaa

There is the absence of strong political ideologies to distinguish one political party from another. In several cases, parties split largely on personality conflicts. The stand taken by a party on a project or a scheme is again mostly on political calculations bereft of logic or economics.

So, one sees the practice of a party succeeding another in power busy demolishing the projects of the predecessor government. Tamil Nadu is only too familiar with this practice eg. Jayalalithaa’s AIADMK government converting her predecessor Karunanidhi’s dream project of a secretariat building into a multispecialty hospital at a huge cost and her putting on hold vital highway projects.

Chief Minister AP, Jagan Reddy follows this practice. He had been an ardent opponent of the new capital of AP, the dream project of his arch-rival and predecessor, Chandrababu Naidu. The latter had ambitious plans to develop it as a Smart City at a cost of thousands of crores of rupees. Naidu had taken great pains in mobilising international and national expertise to vest this project with state-of-the-art infrastructure and facilities. He has a reputation for building Hyderabad as a model state capital.

Jagan Reddy has been accusing Naidu of squandering a lot of public money and also of corruption. He is out to undo the work done so far. Recently he has outlined the plan to have three capitals: the legislature at Amaravati, the executive at Visakhapatnam and the judiciary at Kurnool. His reasoning is for decentralised and simultaneous development of the three cities. He cited the experience of South Africa on such a scheme.
Significant work on building Amaravati as capital is already in progress. Jagan Reddy would do well to reconcile to continue with the original plan and expedite the construction of the capital at Amaravati.
The agriculture and the education-rich state has the potential to grow faster. It needs all the attention of the political leadership to achieve this.

Slow death of globalisation

Around the 1990s there was a wave of liberalisation: the fall of the Berlin wall and the unification of Germany. The break-up of the Soviet Republic. The market orientation of China. The end of the licence-permit-quota raj in India Then followed the euphoria over globalisation.

The limitations of the five decades-old General Agreement on Trade and Tariffs that regulated world trade in goods in the post-war years were realised. This led to the setting up of the 164-member World Trade Organisation. The scope for WTO widened to include trade in agriculture, services, and intellectual property. WTO functioned reasonably well over the next two decades when world trade expanded. The highest dispute resolution body of WTO was its seven-member appellate board. Members were selected with an eight-year term each, with the unanimous approval of all the members.

Former Commerce Secretary, AV Ganesan was a distinguished member of this board (2000-08). I remember his dedicated service to WTO, travelling frequently to Geneva. He was succeeded by Ujal Singh Bhatia whose term also ended recently.

USA maintained its dominant role in foreign trade in the decades following the Second World War. Countries in Europe, Japan, and South Korea, devastated by the war, were rebuilding their economies. The booming USA liberally funded the reconstruction and was generous in supporting multilateralism. The country was the chief beneficiary of free trade.

The last two decades are witnessing the emergence of China as the largest manufacturer of goods and a dominant trader in goods and services. The US is understandably not quite reconciled to this change. Thus, we witness the desire of President Trump to progressively get out of multilateral bodies. In contrast, China and India emerging as strong economies, are advocates of multilateralism!

There has been a lot of disenchantment with the WTO, particularly for the USA. The US has not been comfortable with several rulings of the WTO that were against its tariff policies. President Donald Trump has been increasingly critical of the functioning of several multilateral institutions. These include several units of the United Nations, IMF, the World Bank, the Climate Accord…

With the US not approving the appointment of members of the appellate board, its numbers had dwindled to just one. Even the term of the sole member, a Chinese, will end soon.

President Trump has been opting for concluding bilateral trade agreements with trade blocs and individual countries on terms dictated by him. With Britain exiting EU, the new government of Boris Johnson will also be busy concluding bilateral agreements with different countries and trade blocs. There is also the prospect for Britain moving closer to US and forming yet another trade bloc.

India has to conclude bilateral trade agreements with USMCA and the EU. Both are going to be tough.

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