The Hindu : `An invidious comparison'

Online edition of India's National Newspaper
Saturday, Apr 19, 2003

Southern States

Southern States - Tamil Nadu

`An invidious comparison'

With reference to the article `Two contrasting styles of economic leadership', published in the Business Review of The Hindu on April 14, the Tamil Nadu Chief Minister, Jayalalithaa, writes:

It needs to be pointed out at the outset that this article has made an invidious comparison between the leadership in Andhra Pradesh and Tamil Nadu. A particular bias is easily noticeable since the comparison is of leadership in one case of 7 years in continuity and the other not even fully 2 years old. Obviously significant gains made in Tamil Nadu during 1991-96 are conveniently ignored when Chennai emerged as the Detroit of India. And what about the period between 1996-2001 when Tamil Nadu slipped and fell into an economic and fiscal quagmire? It is also strange why the comparison does not extend to Karnataka and Kerala? Is it that the leadership in Tamil Nadu has to be vilified? Perhaps the author, who has a penchant for harking back to the Nehruvian era of a regulatory regime and boosting the reputations of some worthies built upon development crumbs thrown to particular States by a Union Government based on political alignments, cannot help succumbing to presenting half truths in a noticeably distorted manner.

First of all the context has to be set out clearly. Andhra Pradesh has had continuity of political leadership for more than 7 years. This itself makes the attempt to compare the leadership styles contextually wrong. Andhra Pradesh made an early start on fiscal reforms in the late Nineties. It ensured that it obtained World Bank assistance for complex structural adjustments. It secured project assistance from the World Bank, Department for International Development (DFID) etc., for several new projects. All these were possible due to a clear stand taken on fiscal reforms much earlier than in Tamil Nadu. In Tamil Nadu during the period 1996-2001 there was only total neglect as to the approach to fiscal reforms. As a result, the World Bank moved away and projects in the pipeline languished. Consequently, the State has had to pay a heavy price. With its finances in shambles, Tamil Nadu in 2001 faced certain bankruptcy and was confronted by a multitude of gigantic new problems both fiscal and economic. This daunting task of restoring some fiscal balance and taking the State across the choppy waters of a global downtrend was exacerbated by local factors such as continuous adverse seasonal conditions since 2001, a serious drought in 2002-2003, together with an extremely serious situation posed by the refusal of Karnataka to provide Tamil Nadu with its adequate share of Cauvery water. The first task was to restore fiscal credibility and bring back the State to a new growth trajectory. This task has been undertaken with great elan, panache and dynamism. It is only because of my strong and resolute leadership that the State of Tamil Nadu has just come out from an irretrievable mess. It is only now that a new development agenda has been set. The Tamil Nadu Budget for 2003-2004 is a clear indication that development has come back as the main focus area of the Government. It is only now that the World Bank is taking up Tamil Nadu's development agenda with renewed interest.

Surely the author will recognise the pressing need to set one's house in order before attempting to portray a picture that does not exist. Tamil Nadu has been attending to all those factors which promote growth but have been ignored in the past between 1996-2001. Today after a series of fiscal and economic reforms Tamil Nadu is ready to take off once again. It is a new phase of growth that Tamil Nadu is entering. The author, perhaps taking a blinkered view of the context, has chosen to ignore all these.

The article alludes to the establishment of Central Institutions in different States. He probably likes to totally discount the factor of political leverage in such location decisions. His charge that Ministers from Tamil Nadu in the Centre have done precious little for the State is, perhaps, the only point that rings true. Except for a brief spell of one year in 1998-99, the AIADMK had very little to do with the NDA Government at the Centre. It is the other political parties in Tamil Nadu which have been in power at the Centre for the bulk of the time referred to by the author. He should probably address this question to Mr. Karunanidhi and others who head parties which presently have members in the Union Government. In fact, it is the DMK headed by Mr. Karunanidhi which has continuously had members in the Union Government between 1996 and 2003, except for a brief interlude of one year in 1998-1999.

The author has chosen to be offensive in portraying the leadership styles. He has referred to a recent CII Conference at Chennai and the participation of Cabinet Ministers etc.. What he obviously does not know is that the study on infrastructure presented at this CII Conference was after detailed deliberations prior to the Conference. May be he does not know about my separate meeting with the CII honchos on Tamil Nadu's image and brand building. Such impressionistic and journalistic forays cannot contribute to an informed debate on growth prospects!

Take the case of the power sector in Tamil Nadu. It moved forward by leaps and bounds in 1991-96 under my Chief Ministership. The total capacity was increased by 1300.75 MW during 1991-96 under my rule as against just 560.69 MW in 1996-2001 under DMK rule. This period 1996-2001 was one of apathy compounded with the colossal blunder of relying on small units based on naphtha. The State did not move forward at all. It is only after I took over again that the creation of new generation capacity has been put back on the rails. And in just 2 years, between 2001-2003, 904 MW has been added to the total capacity. An MoU signed with NTPC by TNEB to set up a 1000 MW plant at North Chennai (the first joint venture between a State Electricity Board and NTPC), progress in implementing the Koodangulam Nuclear Power Project with a capacity of 2000 MW, and a shortly to be concluded new MoU for a thermal project at Tuticorin for 1000 MW with the NLC are all now moving forward. Thus 4000 MW of new capacity is now well in sight and more are in the offing. Perhaps the author did not even study the Tamil Nadu Budget for the year 2003-2004 which sets out this road map clearly.

Bold decision making with resolute steps without any hype and practical work is what is called for in the post liberalisation phase. No investments will come to any State, however much the merits are touted, if there are bomb blasts and kidnappings galore. This is a fundamental issue, which can never be ignored. The author has completely missed the wood for the trees in not recognising that, in Tamil Nadu, it is the leadership which contributes to a safe business environment. In fact, one can start out on the comparison with other States only after this is ensured. In Tamil Nadu the guarantee of law and order, perfect harmony and the excellent work atmosphere are straightaway the best growth accelerators, which even a minimalist State should provide and often fails to do so.

The author perhaps would like to try his hand at the formation of a State Cabinet, as his pet obsession, completely disconnected from the social milieu in which the bulk of the electorate remains. An elitist argument for inclusion of those who cannot come through the electoral process is indeed farfetched. The argument that some one is talented or can make a useful contribution only if he drops in at somebody's office is puerile. Surely there ought to be a better measuring scale!

The enormity of the fiscal chaos that my Government inherited and is now setting right brick by brick perhaps has completely escaped the author. For its boldness and sweeping nature, the fiscal reforms programme launched by the Government of Tamil Nadu is unparalleled. Even Andhra Pradesh, which the author would love to eulogise, has taken several years to accomplish what Tamil Nadu has done in the matter of a year and a half. It is strange that this goes completely unrecognised.

If the litmus test for a performing Government is to be seen to be hobnobbing with businessmen in 5-Star hotels and as the sponsor of mega events, Tamil Nadu is perhaps left behind. Copycats however never got anywhere any way! It is Tamil Nadu's firm belief that it is best to address the fundamentals, project the right image, deliver on what you promise and move forward. The author should be registering the signs of this happening now in Tamil Nadu. It is tragic that his mind is stuck in a time machine circa 1967. Far from being a rhetorical question, it would be pertinent to ask the author what those worthies, pre-1967, were doing staying in a system which the author never derides as the root cause for India's economic ailments and inability to grow? It is not in good taste to indulge in such a comical comparison, out of context, when there is a complex agenda before us of faster growth casting aside the ill-effects of drift and neglect which occurred in Tamil Nadu between 1996-2001. I am confident the author among others would like to participate in this effort and make constructive suggestions from now on to make Tamil Nadu move faster.

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