Jaya first needs to address complaints on the economic front

N Madhavan

MORE than political, economic issues seem to have weighed on the minds of people when they gave an overwhelming mandate to J Jayalalitha and her party, the AIADMK. The thumping victory, which kept Tamil Nadu’s record of decisive mandates intact, reveals a sense of anger amongst the people against the DMK regime. Ms Jayalalitha, as she starts her second innings as chief minister, has her task cut out—especially considering the fact that people have no qualms about throwing out a party from power if it is unhappy with its performance.

In her first press conference after taking over as chief minister, Ms Jayalalitha has made it clear that apart from providing a clean, benevolent and efficient administration, she would strive to make Tamil Nadu the number one state in the country. Her immediate priorities should be to identify the problems that earned the DMK government the wrath of the people and address them.

Money supply: People across the length and breadth of the state have been complaining, since 1998, of a significant fall in money supply leading to a liquidity crunch.

The DMK government failed to redress this problem which shrunk business volumes and hence the profits for small businesses. The electorate has voted Ms Jayalalitha to power on the hope that money circulation would return to the levels it was when she was chief minister in the 1991-96 period. Though monetary policies are the prerogative of the Reserve Bank of India, the state government has to identify the cause for this situation and find ways and means within its powers to improve the situation. One of the options before Ms Jayalalitha, according to experts, is to kickstart the state’s economy by unleashing development. This will not only create employment but also make available disposable surplus in the hands of the people who will then spend thereby improving the business levels.

Agricultural sector: It will not be an overstatement to say that farmers won the election for Ms Jayalalitha. They have been impacted by liberalisation which has led to realisation from produce declining while increasing the cost of production. Though the state government has little control over some of these, such as imports and hike in the price of diesel, kerosene, LPG etc it remains to be seen how the AIADMK front acts to lessen the burden of the farming community.

Subsidisation could be one route but that is contingent on the financial position of the state which is in no great shape.

For reformists one thing is certain, free power to farmers is all set to stay. Ms Jayalalitha fought the elections accusing the DMK government of entering into a discreet understanding with the Bharatiya Janata Party (BJP) government at the Centre to charge the farmers for electricity supply.

Sugarcane price: The AIADMK and its allies have attacked the DMK government for failing to keep its promise of paying Rs 1,000 per tonne of sugarcane. If the new government does increase the cane price, then the co-operative and public sector sugar mills in the state, which are already in a financial quagmire, would sink further. The sugar economics does not justify such a price, especially considering the fact that the retail price is controlled and there is huge carry-forward stock in the country. But the good news for the industry is that the AIADMK government has promised to start projects for using molasses to manufacture alternate fuel for vehicles.

Cement prices: The previous government has been accused of turning a blind eye to a nexus between a certain minister and the cement industry which has caused the cement prices to touch Rs 200 per bag. Ms Jayalalitha, in her manifesto, has promised to break the cartel and initiate legal action to end this ‘scientifically engineered scam’.

With cement being a decontrolled commodity, the state government has little power to interfere in the market place. Its only option is to seek remedy under the Monopolies and Restrictive Practices Commission and establish through its agencies the fact that a cartel does exist. In fact, the AIADMK leader has been blaming large scale unemployment among daily workers, masons, contractors etc., on account of ‘artificially high’ cement prices.

Industrial development: Ms Jayalalitha is likely to focus on attracting new investments which, according to her, had stopped after she brought in multi- nationals, like Ford, Hyundai, Du Pont etc., into the state during the fag end of her earlier rule. She has promised to set up an expert committee to identify new areas for development.
Privatisation: Tamil Nadu has its own share of loss-making public sector undertakings (PSUs). Though the AIADMK’s stand on divestment is not very clear, its opposition to privatisation of Salem Steel plant does send out a signal that the party may be unwilling to take or go along with any decision that is perceived as unpopulist.

Information technology: The AIADMK government is likely to move ahead in networking the state with adequate broadband using optic fibre cabling and increasing awareness about computerisation. Its manifesto even talks of e-enabling co-op banks and the public distribution system.