Election manifestos in Tamil Nadu are full of promises of freebies, though not on a scale as in the past. Releasing the manifesto of the All India Dravida Munnetra Kazhagam, Chief Minister Jayalalithaa on Thursday promised free mobile phones to ration-card holders, waiver of cooperative farm loans, 50 per cent subsidy for women to buy mopeds or scooters, 100 units of free power and other gifts.
Calculated decisionWith other major parties releasing their manifestos earlier, Ms. Jayalalithaa seems to have raised the stakes in what is likely to be a tough election.
Some of these promises, not taking into account the farm loan waiver, are likely to set the State finances back by many thousand crores of rupees. If her promise of total prohibition (though in phases) materialises in the next tenure, the State’s coffers will be set back by another Rs. 27,000 crore in revenue.
Scooter and moped sales in the State average 22,000 units a month, at nearly Rs. 40,000 each. Auto industry experts, while welcoming this promise, however, are worried that the government has to set aside huge sums for granting the subsidy, which they say could be at least Rs. 1,000 crore to Rs. 2,000 crore in the first year.
“There is a strong urban demand for scooters, especially in the women’s category. With a 50 per cent waiver, the demand would get a further boost. Even men might buy scooters in their wives’ names and use them,” said an automobile sector analyst.
Tamil Nadu has nearly two-crore ration cards of various categories. Ms. Jayalalithaa’s promise of a mobile phone for each card means the State would have to procure as many handsets.
However, unlike the Dravida Munnetra Kazhagam’s promise of a smartphone, the AIADMK supremo did not commit herself on the type of phone to be offered. Assuming that a phone would cost Rs. 1,000, this would burden the exchequer by Rs. 2,000 crore.
She promised that the government would repay the education loans of borrowers who remained unemployed. “It is very difficult to ascertain how many students who have taken loans are unemployed. We don’t collate such data. We also can’t assume that those who are not repaying loans are unemployed,” the Chairman of a public sector bank told The Hindu .
Education loansAs of March 31, the total outstanding education loans in Tamil Nadu stood at Rs. 16,482 crore. The DMK had in its manifesto promised to waive off all outstanding student loans.
Ms. Jayalalithaa, in 2011, seeking to rid the monopoly enjoyed by one multiple-system operator or MSO, rolled out the Arasu Cable Corporation with a promise of providing cable TV service at Rs. 70 a month. Her current manifesto promises free set-top boxes to subscribers of Arasu. The network has 70 lakh subscribers, and the State has a potential subscriber base of 1.5 crore households. Even if set-top boxes are bought in bulk under a tender agreement, a cable operator pointed out that it could cost the State about Rs. 2,200 crore.
Tamil Nadu’s current fiscal deficit has been projected at Rs. 36,740.11 crore.
