Aiyo Amma! Jaya's manifesto spells trouble for Modi's reform plan if he becomes PM

The general assumption in the national commentariat is that if Narendra Modi comes to power after the next general elections, he can count on at least one state-level chief minister with a sizeable number of seats in parliament - J Jayalalithaa of Tamil Nadu.

However, if Modi - or any other government formation that includes her, for that matter - is expecting her to be an ally focused only on her regional interests, he should think again. A look at the economic manifesto of the All India Anna DMK, released yesterday (25 February), makes one wonder if she had written it herself or got substantial editing help from Comrade Prakash Karat.

The two or three things a reformist government may not have a problem with is her proposal to raise the income-tax exemption limit to Rs 5 lakh (not unthinkable), selling natural resources through public auctions (which is now a near national consensus), bringing back black money (what’s the harm in promising it anyway?), or even handing out freebies such as mixies, fans, cows and goats to the electorate - as she has done in her state. But the rest of the manifesto is a sure death warrant for reform. This is why Comrade Karat, her potential ally in Tamil Nadu, may be looking pleased as punch.

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Here’s a sampler of her promises, which any PM-in-waiting should take note of:

- The AIADMK, if it is any position to dictate terms to the next government, will roll back the pricing freedom now given to oil marketing companies to sell petrol and diesel at market prices. This means subsidies could soar - worsening the fiscal deficit.

- It will change the coal mining policy to ensure that state enterprises are able to obtain coal at lower prices even while increasing revenues to the government. How she is going to manage the trick of reducing prices and still earn more revenues is a trick we don’t yet understand.

- An AIADMK-supported government will halt the tide of privatisation of the public sector. How she will reform banks, which are in dire need of capital, is not clear if the state is going to retain all its crown jewels-turned-charcoal.

- Households will get more subsidised cylinders. At 12 a year, already 97 percent of households are subsidised. She will essentially seek to go back to the old regime - with direct consequences for fiscal consolidation.

- Of course, FDI in retail will be a dead letter. No problem here with any government. But the world will look askance at this idea.

- She will nationalise rivers - an idea which will be dead on arrival since this would need all states to agree. An unlikely prospect.

- She will seek to scrap the UPA’s ‘half-baked’ Food Security Bill, and replace it with a universal public distribution system. This could just pass muster the BJP could see this as an effort to modify the costly Food Security Act. However, it is not clear if this means the scheme to replace subsidised food with cash benefits will ever take off.

The most evocative statement in her manifesto for the nation is this one: “There would be no room for even the word corruption if the nation’s assets and natural resources are not sought to be given away at throwaway prices to private entities but are transacted only by means of public auctions.”

This is really a dig at rival DMK, whose minister A Raja is on trial for the 2G scam.

Of course, it is possible to say who cares what manifestoes promise? Well, the recent trend has been that governments do actually deliver on their bad (populist) promises (free this, free that), even if they don’t on the more sensible ones, like creating jobs or bringing down inflation.

It is also possible to dismiss the Jaya manifesto as merely her first gambit in the race for Prime Ministership in case a non-BJP, non-Congress formation looks most likely after the May election.

In preparation for that, an 11-party alliance was announced yesterday by Comrade Prakash Karat of the CPI(M).

However, if we assume that a Modi-led government is more likely than a Third Front-led one, we are left with the worry that Jaya will brandish her manifesto as the lever for supporting any government.

Modi, or anyone else for that matter, is not going to find it easy to handle Amma.