Sasikala vs O Panneerselvam: Whoever wins, Tamil Nadu will inherit a debt-bomb left by Amma
No matter whether it is O Panneerselvam or VK Sasikala who ultimately emerges victorious in Tamil Nadu, a huge debt pile and drought-hit economy await
No matter whether it is O Panneerselvam or VK Sasikala who ultimately emerges victorious in Tamil Nadu, a huge debt pile, a drought-hit economy and millions of people in the southern state who are so used to enjoying decades of populist policies, await the new incumbent. Winning the chief minister's role, thus, will be only the beginning of a long, tough battle for either OPS or 'Chinnamma'.
Tamil Nadu politics have always been dominated by personality cults, from the days of MG Ramachandran, through J Jayalalithaa and now to Panneerselvam and Sasikala. Rather than an ideology or an economic agenda, personalities dictated the political regimes and even daily lives of India’s sixth most populous state. The leaders kept their flocks together by rolling out such goodies as refrigerators, gold chains, or TV sets ahead of elections.
To understand how much the personality cult dominates the state’s scheme of things one need to only take a quick glance through Tamil Nadu’s 2016-17 Budget document, presented by then finance minister, and later caretaker chief minister, Panneerselvam on 21 July. The word 'Amma' (mother) is used six times, the adjective 'Puratchi Thalaivi' is used once and references to ‘chief minister’ 31 times.
It reminds you the verses of old Hindu scriptures that typically begins with a prayer to the cosmic force. Panneerselvam, appears to offer prayers to the AIADMK supreme leader often in the Budget speech, thus making the whole 86-page document a humble submission at the feet of his and his party men’s supreme 'mother'. The 'Demigod of the AIADMK' image is something Amma inherited from MGR and is now being sought by her two biggest loyalists.
Panneerselvam’s 2016-17 Budget document waxes eloquent about Jayalalithaa’s iconic cult status. Terms like, "unparalleled", "unflinching" "historic", "infinite love" and "affection" are used to describe Jayalalithaa. There is no other Indian state like Tamil Nadu, where political leaders enjoy blind devotion of their followers, mostly from the poorest strata of the society. For the most part of her life, Jayalalithaa carried the stature of a demigod, first as an actress and later as a politician, before whom her supporters where never shy to prostrate. For them she was never human.
Most of the social welfare schemes in the state are named after her — ‘Tamil Nadu Village Habitation Improvement’ (THAI) scheme (‘Thai’ in Tamil means mother), 'Amma Unavagam' (subsidised food), 'Amma Kudineer' (drinking water scheme), Amma laptops, 'Amma Baby Care Kit', 'Amma Magapperu Sanjeevi' and 'Amma Arogiya Thittam'. There are a number of such schemes that carry her name. People adore those products/services as mother’s blessings, thus melting the thin line between political populism and insane, often blind personality-driven politics. Will OPS or Chinnamma replace these words from now on?
The populist bandwagon
How did Jayalalithaa win the hearts of the poor?
To say the least, she was the 'mother' of all freebie schemes that ensured the support of the middle- and lower-income class in many areas. To be sure, some of these were transformative in nature in the areas of education, housing and aiding small entrepreneurs. Certain examples include the World Bank-aided ‘Pudhu Vaazhvu' Project launched in 2005. Under this scheme, the government claims to have given job-oriented skill training to 3.27 lakh youths. The THAI scheme, so far implemented in 71,126 habitations pertaining to 9,511 village panchayats and the housing scheme under which in the past four years, the Tamil Nadu Housing Board has constructed 10,059 units at a cost of Rs 565.92 crore — including 2,293 houses for the low income group.
Amma was also known for her investor-friendly approach, which explains the reason why the state is home to more industries and employment than any other Indian state. Tamil Nadu is also home to a small-sector movement with the Micro, Small and Medium Enterprises (MSME) sector providing employment to 63.18 lakh persons. No doubt, Jayalalithaa had always been an able administrator. This is evident from the progress made by the state in the areas of poverty eradication, social welfare, investor-friendly measures and overall economic numbers.
Tamil Nadus Gross State Domestic Product (GSDP), which fell to 3.4 percent in real terms, during 2012-13, was reversed to 7.3 percent towards 2013-14 — higher than the national average growth rate of 4.7 percent in that period. The state recorded a GSDP growth rate of 8.8 percent in 2015-16 as against the country's Gross Domestic Product (GDP) growth rate of 7.6 percent, based on the 2011-12 constant prices. The gross fixed capital formation, which indicates the investment activity too has improved significantly, touching Rs 34,091 crore in Fiscal Year 2014 compared with Rs 23,054 crore when her predecessor, M Karunanidhi left office in 2010-11.
A Tamil Nadu debt-bomb in the making?
But, in the process of rolling out freebies, she also built a debt bomb for the state. At this point, TN’s debt is over Rs 2 lakh crore.
But, according to an IndiaSpend analysis, TN’s debt has witnessed a 92 percent increase over five years ending 2015. According to the Reserve Bank data, TN registered the highest gross fiscal deficit among all states in 2015-16 at Rs 31,830 crore. For current fiscal the TN government pegged its fiscal deficit at Rs 40,534 crore or 2.96 of GSDP.
In the past five years — when Jayalalithaa was in office, the debt level of Tamil Nadu has risen 105 percent from Rs 1.14 lakh crore to Rs 2.35 lakh crore. This is the sharpest increase in debt levels by a large state. Of all Indian states, only Haryana has beaten Tamil Nadu with a 141 percent rise in public debt. Needless to say most of this debt is the consequence of Jayalalithaa’s populist bandwagon aiming at the poor of the state. Other large industrial states like Maharashtra and Gujarat have seen their debt level increasing by a relatively better 64.5 percent and 60.3 percent in the same period.
There is no corresponding trend in tax revenue. According the to 2016-17 Tamil Nadu Budget, tax revenue was estimated to increase to Rs 90,691.87 crore in revised budget estimates for 2016-2017 from Rs 86,537.70 crore as per the revised estimates of 2015-2016.
It is not just the debt pile, the new chief minister, also needs to deal with the drought situation that has severely hit the farming population.
For Tamil Nadu, Amma has left behind an era of political populism and a debt-bomb in making. Amma’s presence will still be felt in the state's cabinet meetings through her image and the memories of her charismatic leadership. At the end of the power battle, along with her legacy, the task of dealing with this inherited debt-bomb in the making and the pain of a drought-hit state will now go to either her long-term trusted lieutenant Panneerselvam or a ‘friend’ of three decades Sasikala.
Whoever emerge as Amma’s successor will also likely follow her populist policies to keep the flock together.
With inputs from Kishor Kadam
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