The sad truth is that all decisions of the government of Tamil Nadu seem to be made on the basis of political considerations rather than improving the state’s economic situation and relieving the state from a severe financial crisis.
by NS Venkataraman
After ten years of governance by the AIADMK party, the DMK party was elected to power in the Tamil Nadu State Assembly elections seven months ago with an absolute majority.
The majority of people voted for DMK and its allies mainly because of the promise made during the pre-election campaign that corruption would be eradicated in Tamil Nadu and that certain gifts would be extended to the people in addition to the many existing gifts.
Unfortunately, during the last seven months of DMK’s reign the focus has been on politics rather than economics, with no noticeable reduction in corruption and the promised freebies are not fully honored due to the serious financial crisis in the state. Obviously, a lot of promises were made during the pre-election campaign without considering the state’s financial situation and possibly believing that the election should be won somehow.
Magnitude of the financial crisis:
Today, Tamil Nadu is going through a period of severe financial crisis, with the total outstanding debt of the Tamil Nadu government expected to increase to around Rs.6.59 lakh crore in 2020-21, where development loans from the State (SDL) represent Rs.4.65. lakh crore. Other liabilities include obligations of UDAY bonds, loans from financial institutions and others. According to data from the Reserve Bank of India, the government of Tamil Nadu raised a loan of Rs.62425 crore in 2020-21 and Rs.39,000 crore in 2021-22 (until September 2021) through borrowing on the Marlet.
The sad fact is that in the last three or four years loans have been taken out even for such expenses as salaries, pensions and interest payments. Tamil Nadu is expected to spend 20.5% of its revenue on interest payments in 2021-2022, which would leave little money for the implementation of development projects. Over 60% of the Tamil Nadu government revenue is said to be spent to pay the salaries and wages of government employees.
It’s hard to imagine a Tamil Nadu government’s financial crisis more severe than this one.
Corrective actions needed:
Obviously, what the government of Tamil Nadu needs to do is increase its tax collection, which is not the case due to the high level of corruption and the inefficiency of the government apparatus at different levels. Besides, it is necessary to get rid of losses incurred by public sector / government enterprises such as TANGEDCO (Tamil Nadu Generation and Distribution Corporation Limited), State Transport Corporation, etc., as these institutions have suffered heavy losses for several years. now and with no possibility of operating profitably in the near future. In addition, the non-performing assets of the government of Tamil Nadu must be sold to reduce the debt. Unfortunately, in the last seven months of DMK governance, nothing has been done towards such essential milestones.
On the other hand, the financial crisis in some state-owned enterprises is worsening due to the populist actions of the government. For example, despite the heavy losses suffered by the national transport company, the trip was made free for women on the bus, which means that the income of the national transport company was reduced to almost half of the level previous.
Crisis in TANGEDCO
In the case of TANGEDCO, there are several allegations that the electricity is purchased at a very exorbitant cost by TANGEDCO, with suspicion as to the motive for the decision to purchase power. The point is, TANGEDCO’s bank loans have been placed on negative watch. In addition, there is said to be approximately Rs 3,300 crore of uncollected amount for electricity distributed to several municipalities and state government-owned organizations. It’s shocking. No meaningful effort to improve the effectiveness of TANGEDCO appears to have been undertaken so far.
There is an urgent need to reduce the unproductive expenses that are currently incurred such as the establishment of a public park in Coimbatore, a large library in Madurai, a memorial for a political leader, the construction of Tamil Nadu House in Delhi, etc. These are certainly expenses that can be postponed until financial conditions improve.
After coming to power, the DMK government was
announcing various committees to suggest economic reform measures and promote industrial growth, including a committee made up of internationally renowned economists. Many people wonder why so many committees on so many issues are needed when the solutions to the problems are very well known and only strong, effective and proactive measures are needed to be implemented.
As the Tamil Nadu government’s financial crisis continues unabated and perhaps largely unattended, the area of ââconcern is that there appears to be more politics than economics in the governance of Tamil Nadu in the past. ‘actual hour.
The DMK government started off on the wrong foot by unilaterally calling the central government a unity government (Ondriya arasu in Tamil), which only serves to give proxy satisfaction to certain political groups in Tamil Nadu.
More than any other topic, it appears that the DMK government has focused on âreformingâ the Hindu temples in the state which are under government control. He appointed priests in Hindu temples, without observing traditional practices and the rules for appointing priests. In addition, the DMK government claims that it is significantly reclaiming the land invaded by Hindu temples. At the same time, he uses the lands belonging to the Hindu temples to set up colleges there, while there are no trustees for the temples and the government is only the administrator of the temples and cannot be behave like an owner. The court has now suspended this order from the state government to use temple land for other purposes.
In addition, the DMK government has taken steps to collect gold, silver and diamonds in the possession of the temples and smelt gold and silver and use them to increase the financial resources of the state. This measure was also challenged in court, and the court issued an order against the smelting of gold and silver belonging to the temples, until the court issues its final decision. At the same time, the Chief Minister announced a special allowance, etc. for some priests in Hindu temples and these measures are suspected of covering unnecessary measures aimed at “reforming” Hindu temples.
This measure of interference in the administration of Hindu temples is criticized, because several leaders of the DMK government have declared themselves atheists and non-believers in God.
There are many other examples of policy in the administration, such as requesting the abrogation of NEET (entrance exam) for admission to medical school, insisting that only Tamil prayer song be sung in educational institutions, government functions, public sector companies and everyone should stand up during prayer. So many other examples of politically motivated orders in the name of promoting Tamil culture have been initiated, which seems not to be a problem, especially when it comes to development-oriented governance.
While the focus should be on economic and industrial development and improving the state’s financial condition, discussions in Tamil Nadu political forums now focus only on counterproductive political issues.
In public forums and the media, there is little discussion of economic development strategies and the financial crisis facing the state. While the government frequently announces that several memoranda of understanding have been signed for the establishment of industrial projects that have a long gestation period, nothing has been said. to prevent existing industrial units from slipping into losses.
For example, the fireworks industry in the Sivakasi region is facing serious problems today for various reasons and the government has done nothing to save the Sivakasi units.
The sad truth is that all decisions of the government of Tamil Nadu seem to be made on the basis of political considerations rather than improving the state’s economic situation and relieving the state from a severe financial crisis. For example, the Sterlite copper unit at Tuticorin remains closed and the Chennai Salem highways project remains virtually stagnant due to political considerations of the state government. The Neutrino Project is an extremely important project that would boost Tamil Nadu’s research status in the global arena. No one in the DMK government is talking about this project, for any reason.