The Telegraph
Since 1st March, 1999
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Is bankruptcy “the price of populism” or is it “the driver of reforms”' Asked to choose between these two catchy economic slogans doing the rounds in the corridors of power of many financially hamstrung state governments today, the Tamil Nadu chief minister, Jayalalithaa Jayaram, notwithstanding a backyard full of political problems, is most likely to opt for the second.

While the All India Anna Dravida Munnetra Kazhagam government completed two years in office on May 14, the 55-year-old charismatic Jayalalithaa, was being openly lauded as the “bold lady, the gold lady and the mega-chief minister” by her friends in the state Bharatiya Janata Party, which is unabashedly looking to renewing the political alliance with the former. She is clearly in a transitional stage of her career, although she gives nothing away to either friend or foe, and rules with the mystique of a royal queen.

If Amma has sternly managed this make-believe upto now, it is largely because of the rickety political stage in Tamil Nadu. This is notwithstanding the legal uncertainty she faces, over the appeal pending before the Supreme Court in the Tamil Nadu Small Industries Corporation land deal case, one of the 46 graft cases filed against Jayalalithaa and her erstwhile ministerial colleagues by the previous Dravida Munnetra Kazhagam regime.

The switch from political to economic issues looks to be more effective for Jayalalithaa than Laloo Prasad Yadav’s “lathi logic” in Bihar. And this strategy has paid off politically, if the AIADMK’s resounding wins in all the four assembly by-elections, including the last one from Sattankulam in Tuticorin district, are anything to go by. These by-elections were held after Jayalalithaa reentered the assembly by winning the Andipatti by-poll last year, after the Madras high court acquitted her in the TANSI land deal and the Pleasant Stay Hotel cases.

Now 141 of the 234 assembly seats are in the AIADMK’s kitty. Three rebel Congressmen led by D. Kumaradoss have recently joined the AIADMK, giving it that magic number of “140 plus” in the house. Also, the opposition parties continue in disarray. Thus, the political risks for Jayalalithaa are virtually nil. There is no doubt among the political circles in Chennai that Amma’s government will complete its five-year term.

She began with a bang politically, by being the first state to invoke the provisions of the Prevention of Terrorism Act to jail the Marumalarchi Dravida Munnetra Kazhagam leader and National Democratic Alliance member of parliament, Vaiko, in July last year for his open support to the banned Tamil militant outfit, the Liberation Tigers of Tamil Eelam. This was followed by the arrest of Tamils Nationalist Movement leader, P. Nedumaran. Jayalalithaa’s shrill rhetoric of giving no quarter to terrorism in Tamil Nadu was quick to catch the BJP’s fancy.

Jayalalithaa even refused transit for possible medical assistance to the LTTE ideologue, Anton Balasingam, suffering from a kidney ailment, to aid the LTTE peace talks with the Sri Lankan government. And as the POTA dragnet began to spread in the subsequent months, culminating in the arrest of R.R. Gopal, the editor of Tamil magazine, Nakkeeran. He had been the government’s emissary under the previous DMK regime for negotiations with the forest brigand, Veerappan, to ensure the release of the Kannada thespian, Rajkumar. The long arm of the anti-terror law has almost come to the threshold of the DMK president, M. Karunanidhi now, or so it is feared.

The apprehension in political circles that Gopal might spill the beans to implicate Karunanidhi and the film star, Rajnikanth, has increased in the last month, since Jayalalithaa announced a high-level vigilance probe against the DMK chief. The charge is that ransom money intended for Veerappan, changed hands at the former chief minister’s Gopalapuram residence This has been alleged by the former Karnataka director general of police, C. Dhinakar, in his post-retirement book on the Rajkumar abduction.

In the light of this scenario, the DMK and its other NDA allies, including the Pattali Makkal Katchi led by S. Ramadoss, and the MDMK are now demanding the scrapping of POTA, after having supported it in Parliament. Significantly, the BJP, with which the DMK had already snapped ties in the state and which is warming up to Amma, is the only NDA constituent in Tamil Nadu to oppose this demand.

If the POTA rigour has already taken Jayalalithaa closer to the BJP, the law banning forcible religious conversions enacted by her government last year represents the social obverse to this dynamic. This had been preceded and followed by other pro-saffron measures like institutionalizing the scheme of free meals in temples, opposing the Archaeological Survey of India’s move to take control of the Arunachaleshwarar Temple in Tiruvannamalai and, more recently, the enactment in the assembly on steps to boost the temples’ incomes in the state.

Jayalalithaa’s launching of a free-meal scheme in select mosques in the state did not invite the usual BJP label of “pseudo-secularist”. But strangely, her government’s bill to bring in samadhis brindavanams (places where holy saints and gurus are laid to rest) within the ambit of religious institutions as defined in the Tamil Nadu Hindu Religious and Charitable Endowments Act, was resented by the saffronites. As the BJP’s state general secretary, H. Raja, put it, temples as places of public worship could not be equated with samadhis. This possibly refers back to the dilemmas faced in the Ayodhya controversy as well.

However, these issues, while keeping politics in a state of flux, have hardly had an impact on her bold forays into the area of economic reforms. Ironically, in the absence of a cohesive opposition strategy, they have given Jayalalithaa a Florence Nightingale type of “lady-with-the-lamp” profile, coming with a candle in hand to resolutely dispel the state’s financial darkness.

When the state’s finances took an ominous turn in November-December 2001, with the government struggling to pay salaries to its staff and unable to meet payment obligations to its contractors, the top echelons of the bureaucracy sensed that it was the most opportune time to initiate hard reforms. Technically, Jayalalithaa was not the chief minister then, with her proxy, O. Panneerselvam, filling in for her.

As the state government increasingly found its current revenue expenditure being financed by more borrowings, tough measures were put in place, including the decision to downsize the government and a golden handshake policy for its public sector units and trimming of pension benefits. This reform process was further consolidated since the last fiscal year, while keeping intact the basics of a “social safety net”.

The Jayalalithaa regime has drastically slashed food subsidies, but responded to the severe drought with a free 30 kilogram supply of rice to the poorer sections of the people and farmers. It radically scrapped the supply of free electricity to farmers, bowing to World Bank diktat, yet came up with a direct cash subsidy scheme to enable small and marginal farmers pay their energy bills.

Moving further to put its fiscal house in order, the government has not only begun to act on the recommendations of a staff and expenditure reforms commission and a tax reforms and revenue augmentation commission, but a few days back also enacted the Tamil Nadu Fiscal Responsibility Act, 2003, that has set timebound targets to reduce the state’s revenue and overall fiscal deficits by 2006-07. It has also unwound the process of privatization of loss-making PSUs, unprofitable public transportation routes and even of cooperatives.

While all these measures have made it possible for the AIADMK regime to negotiate with the World Bank for a larger portfolio of loans (to the tune of Rs 9,874 crore) to revive the development process in Tamil Nadu, it has also given Jayalalithaa a talking point on making the state “Number One” in the country and going all out to develop women as a distinct constituency by forming self-help groups, in the context of the 2004 Lok Sabha elections.

With this road map seemingly in place, the optimism Jayalalithaa exudes that she could politically jettison anybody and everybody, from the Congress to the left parties, is precisely what puts her in a transition orbit. Whether or not she competes with her Andhra Pradesh counterpart, N. Chandrababu Naidu, in this high stakes game, she is busy polishing her distinctive political stamp of being “ever unpredictable”. But a severe drought could upset her calculations.

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