Industry is hailing Jayalalithaa?s Vision 2023 document as a dream with deadlines, while sceptics feel it has no concrete plans

After J Jayalalithaa swept into power in Tamil Nadu, there were great expectations. They were soon followed by murmurs of disappointment. Critics started accusing her of concentrating on fixing her opponents, dishing out freebies, getting rid of the extra-constitutional authorities in her life and politics, instead of focusing on developmental activities. The chief minister, the astute politician that she is, has silenced everybody by first giving the go-ahead to the Kudankulam nuclear power project that had been stalled for many months by anti-nuclear activists. Soon after, she released her Vision 2023 document setting out her dreams for Tamil Nadu.

This envisages an expenditure on physical infrastructure of R15 lakh crore over 11 years, earmarking an average of R1,35,000 crore per annum. The document has identified 10 themes and an equal number of strategic initiatives. Sectors like energy, transport, industrial and commercial, urban infrastructure, agriculture, human development (health and education) and general and social infrastructure projects will get an investment boost. The total investment in the energy sector is estimated at R4.5 lakh crore. The new power generation capacity dedicated for Tamil Nadu will account for a bulk of the investments, at R2.8 lakh crore. The state?s transport infrastructure, comprising of airports, seaports, rail and road networks, will see an investment of R3.7 lakh crore. The industrial and commercial infrastructure will attract an investment of R1.5 lakh crore. While urban infrastructure will get R2.75 lakh crore, the agriculture sector will witness an investment inflow of R40,000 crore. Human development in the state is to get R30,000 crore.

Under Vision 2023, the funding for infrastructure will mainly come from four sources. First, the Tamil Nadu government will fund its share of the infrastructure requirement. Second, through appropriate sectoral reforms, by making infrastructure services self-financing and sustainable by ensuring suitable cost recovery. Third, the Tamil Nadu government will seek Central government funding to the extent it can. And fourth, the Tamil Nadu government will seek participation from the private sector (including FDI, domestic investments, and bank funding) in infrastructure projects.

The CM hopes to make the state one of the three top investment destinations in Asia, increase the state?s GDP to 11%, a six-fold rise of the annual per capita income to R4.5 lakh and an addition of 20,000 MW of power capacity, among other things. Through an inclusive growth plan, the state will largely be free of poverty by 2023. The state, now reeling under a crippling power crisis, will have surplus electricity. The document also seeks to provide piped and pressurised water to all citizens, eradicate slums by building 2.5 million affordable homes, achieving universal secondary education, building high-speed highways, unleash a second green revolution and develop 10 world class cities in the state. The vision document is said to be the joint effort of the Asian Development Bank (ADB) and the state government.

Industry is hailing the document as a dream with deadlines. Envoys from Australia and the UK have already called on the CM to express their countries? interest in investing in the state. However, there are some skeptics who feel that the document contains no evidence of any concrete steps having been worked out on implementation. The hope to make infrastructure services self-financing and sustainable by carrying out appropriate sectoral reforms and ensuring suitable cost recovery is again a bit vague. One would have liked to see cash flow charts and proper statistics. The state government is confident of the participation of the private sector (including FDI, domestic investments, and bank funding) to the extent of one-third (or R5 lakh crore) of the outlay at the rate of about R60,000 crore from now on. There are those who worry about the poor record of PPP projects.

Tamil Nadu was one of the fastest-growing states in the country (11.5%), which saw its growth dropping to 5% in the last four years. It is not that the state did not attract investment. It has become the automotive hub of the country and only behind Karnataka in IT exports. The problem has been the lack of commensurate growth in infrastructure, particularly power. Many industrialists, especially those outside Chennai say that the unequal distribution of shortage, a four year old mistake, needs to be set right now.

There is huge idle capacity among MSME companies, especially in West and South Tamil Nadu, which is turning many sick and so has been destroying employment opportunities in those parts of the state. The growth rate of the state has come down due to a lack of power. The textile companies outside Chennai are irate that VAT-paying companies like them are denied power while input VAT-refund seeking companies and suppliers of goods to those who seek input VAT are getting power. They are hitting out at IT companies. The textile and foundry manufacturers in Coimbatore say that these companies have standby power and a standby to standby power. The cost of power is a fraction of their costs; if the cost of power doubles, it will make no impact in percentage terms to their results. They call MNCs who have put up plants with all kinds of tax incentives and assured power supply blood suckers.

Chennai-based HT industries, mainly auto-component manufacturers, also have standby generators. The power cost is between 2-4% of their turnover. Not sharing the shortage helps them to increase their profits by 2-3% of their turnover. Almost all of them operate at much higher profits on turnover and will be able to remain highly profitable even without this benefit. The divide between the power haves and have-nots is leading to all kinds of tensions.

So the CM has her task and priority cut out, having said that there is now hope in the horizon. Many feel that having a vision is very important and that implementation will follow soon.

sushila.ravindranath@expressindia.com