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Why no MEGA Central investments in Dravidian Party rule?

In the 1950s and 1960s large PSUs ICF, NLC, BHEL, MRL and MFL were set up in Tamil Nadu. Such investments dried up since. Today there are big ticket public sector investments in several other states. It is zilch in TN.

Why no MEGA  Central investments  in Dravidian Party rule?

What cordial Centre-state relations can do is best exemplified by the flow of mega investments in public sector projects. Tamil Nadu benefited immensely through these in the 1950s and 1960s. 

The Integral Coach Factory, Neyveli Lignite Corporation, BHEL (Tiruchi, Ranipet and Pudukottai), Heavy Vehicles Factory, Chennai Petrochemicals, Madras Fertilizers... have brought significant investments, employment and skills apart from substantial tax revenues to the state. Such investments have been missing during the long rule of the Dravidian parties. 

Contrast this with the recent spurt of big ticket public sector investments by NDAII in other states.

Mega PSU investments in other states

Look at the size of investments recently announced in a few states: 

• State-owned oil firms IOC, BPCL and HPC signed an agreement to set up jointly the world’s largest refinery and petrochemical complex with a refining capacity of 60 MMTPA at Ratnagiri, Maharashtra, at a cost of Rs 260,000 crore. This will fulfill the future fuel demand and the export potential of the country. 

• On 7 March 2017 Prime Minister Narendra Modi dedicated to the nation ONGC Petro Additions Ltd, a petrochemical complex at Dahej, Gujarat, built at a cost of Rs 30,000 crore. This is a joint venture promoted by ONGC, GAIL and GSPC. This petrochemical plant can produce 14 lakh tonnes of polymers annually

• The high-speed rail track between Ahmedabad and Mumbai has been cleared by the Railways at a cost of Rs. 98,000 crore. Railways have also cleared for the Mumbai suburban railways an investment of Rs. 54,000 crore for constructing an elevated suburban rail system over the existing tracks the dedicated freight corridors linking Delhi with Mumbai and Amritsar with Kolkata which together may involve an outlay of Rs 100,000 crore.

• The 2539 km ‘Urja Ganga’ gas pipeline project of GAIL to be built at an investment of Rs 12,940 crore, passes through five states (UP, Bihar, Jharkhand, Odisha and West Bengal) that would benefit 40 districts with piped gas. This project will also be used to supply gas to three fertilizer plants which are expected to bring investments of Rs.51,000 crore.

• To revive sick fertilizer units, RCF has signed an MoU with Coal India Ltd (CIL), GAIL and FCIL to set up a coal-based fertilizer plant at Talcher.  The 3850 MTPD urea and 2200 MTPD ammonia plant will cost of around Rs.7700 crore. 

• Reliance Industries spent Rs.60,000 crore on its Jamnagar refineries. Another Rs.126,000 crore is being invested on a petro-chemical complex.

• Reliance Industries, in collaboration with BP Plc, has announced $ 6 billion (Rs.40,000 crore) investment to develop their gas fields in the KG Basin off Andhra coast. RIL has already invested around $ 9 billion in developing off-shore gas production in the KG Basin.

These are in addition to large scale investments made by private companies in the power and telecom sectors.

In contrast, except for the Kudankulam nuclear power plant built with Russian assistance, there has not been substantial investments in Tamil Nadu. Even in the case of Kudankulam that took nearly 16 years for construction, the project received little support from the state government. The promised supply of water from the Thamirabarani River was not provided. Nuclear expert Dr M R Iyer points to the risk of depending wholly on desalinated water which can fail in the event of a disaster. The AIADMK government also did not act in time to curb the agitation led by Udayakumar and several NGOs receiving support from several foreign vested interests. 

The massive investments made on the project suffered grievously by delayed construction caused by a mismatch in supplies, deterioration of equipment stored due to the long construction phase and also due to the apathy of the state government. Jayalalithaa acted firmly only after experiencing the havoc caused by a severe shortage of power in Tamil Nadu in 2012 when most parts of the state suffered power cuts of over 14 hours a day. 

 

They treated PSUs alien... 

Both the DMK and the AIADMK have been indifferent in attracting significant Central investments. They  treated the PSUs as alien and didn’t evince much interest in their expansion. In the 1950s and 1960s under the Congress rule, Tamil Nadu did attract handsome investments in the public sector: the Integral Coach Factory, Neyveli Lignite Corporation, BHEL and the Heavy Vehicles Factory involved substantial investments, contemporary technologies and large-scale employment. These made a rich contribution through imparting skills, managerial capabilities as also provided jobs and revenues to the state. Look at the massive contribution of NLC to rural electrification of the state and to expanding agriculture, till then the preserve of the Thanjavur and the southern districts, to the northern districts! At the massive contribution of BHEL in elevating Tiruchi as a prized town for engineering -  forging, fabrication, welding and other forms of metal forming - supporting hundreds of ancillary industries and for Tiruchi emerging a leading centre for combustion engineering, wind turbines...

For 50 years from 1967, the Tamil Nadu government was headed by popular figures from the film industry who had little exposure to state-of-the-art developments in infrastructure, industry, governance and other fields. Significantly C N Annadurai, M Karunanidhi, MGR and Jayalalithaa rarely exerted to visit foreign countries which should have opened them up to development issues. They also felt comfortable mostly meeting their friends and admirers and chamchas from the film industry and party men. Remember the long hours Karunanidhi spent with his admirers on numerous television events that were singing his paeans? 

 

Poor, indifferent relations with  business leaders...

These leaders rarely felt it necessary to interact regularly with business leaders enquiring about their problems and offering solutions. Just look at the contrast provided by Narendra Modi as chief minister of Gujarat and Chandrababu Naidu of Andhra Pradesh. Both visit foreign countries frequently, interact with prospective investors and their state diaspora. In his recent trip to the US, Naidu met with the rich Andhra NRIs in the US and solicited their involvement in the state’s development. Ravindra Sannareddy (Sri City) and Ramachandra Galla (Amara Raja Batteries) are just a couple of NRIs who responded readily. The large presence of Andhras in Microsoft also helped  this IT giant followed by several other large IT companies setting shops in Hyderabad due to the marketing manoeuvres of Naidu. He also hobnobbed with global leaders at the Davos Economic Forum meetings. 

While other states like West Bengal fielded well-educated and articulate professionals as Central and state ministers, Tamil Nadu opted to appoint for these political or family members. Son of DMK supremo M Karunanidhi, M K Alagiri,with little experience in administration, Jagadrakshakan who crossed over to DMK in time to contest the elections and won, Rabi Barnard who was a TV anchor and hardly any of the 37 elected MPs of AIADMK made a mark in the Parliament. These, selected purely on the loyalty factor or family connections, have been allowed to enrich themselves. 

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