Future of Tamil Nadu Politics

12 September 1991

The immediate future of Tamil Nadu's politics now depends on three things. They are: firstly the ADMK government's massive economic problems; secondly the internal feud in the Tamil Nadu Congress 1 which seriously threatens to divide that party; thirdly the difficulties faced by the DMK in disowning the LTTE's Tamil nationalism.

Jeyalalitha was able to defeat Karunanidhi's DMK mainly because of the rising prices of essential commodities. The sympathy wave following Rajiv Gandhi's assassination made her victory a landslide. Karunanidhi complained that his government was sacked before he could take the necessary measures in the State budget to bring down prices and ease the economic burden on the farmer. Karunanidhi's efforts to increase revenue and reduce the State's massive deficit came to nought due to traditional political compulsions which arise from the populist ideology of the Dravidian political parties.

Large budget deficits and an increasing number of subsidies became indispensable for securing political power in Tamil Nadu after the death of C.N. Annadurai, the founder of the DMK.

The populist politics of MGR and Karunanidhi reduced Tamil Nadu from one of the most industrialized state economies to one which has to be heavily subsidized by the Centre and which has to get many of its consumer goods from other states.

Although free meals, rations, price subsidies,agricultural subsidies etc made MGR immensely popular he had to lean more and more on the Centre to run the State. Delhi at times has not failed to use this as a means for political influence and manipulation in its relationship with the Dravidian parties of Tamil Nadu.

Just before the DMK was sacked this year, Chandrasekar's government reduced subsidized rice supplies to Tamil Nadu, under pressure from Congress 1 and ADMK. P. Chidambaram in January argued that the DMK government should be dismissed for the following reasons: That rice of good quality, palm oil and kerosene were not available in the State run ration shops (called reasonable price shops); that these shops were opened only one or two days in the week, that many poor families did not get ration cards after the DMK took action to detect and cancel a large number of ration cards; that many pregnant women were not given the Rs 200 state assistance due to a secret order to limit the number of recipients; the free meal given to widows in the villages - a scheme started by MGR - was cancelled; that many old people in the villages did not get dole, that there was a drastic reduction in rural loans and that only Rs 30,000 was made available to the Panchayats under a Central government scheme to create employment in the villages instead of the Rs 100,000 to each village council during Rajiv's tenure.

The ADMK for its part came up with more instances than Chidambaram where Karunanidhi had withdrawn many subsidies and free goods and services which had been made available to the vast majority of Tamil Nadu's rural poor by MGR

RUINOUS

This why it is still difficult to undermine MGR's political legacy in Tamil Nadu, and this is why the ADMK's political base cuts through all caste differences among the rural poor in general and rural women in particular.
MGR engaged in this ruinous economic policy of emptying the state coffers to sustain a politicized system of subsidies and free goods and services, because of his bargaining power with Delhi, which hopeful of making the Congress powerful enough to capture Statepower again in Tamil Nadu by working close with the ADMK provided the necessary assistance to MGR's policy. Even a brief study of how Tamil Nadu which was industrializing at a rapid pace in the last sixties deteriorated into an economic back water as a result of the populist economic policy of MGR's ADMK would no doubt clearly show how the heavy politicization of the economic aspect of the Centre-State relations in India has been one of the major causes of its current woes.

Karunanidhi's economic policy arose out of the DMK's desire to decrease State's economic dependence on the Centre and thereby diminish Delhi's power to manipulate and undermine the State government. The DMK, it should be pointed out, partly inherited the modernizing, strongly pro-British capitalist outlook from the South Indian Liberal Federation (the Justice Party) the self-respect movement and the DMK.

In the sixties it reflected the interest of the budding Tamil industrialists. C.N. Annadurai's Panathottam (the Money Garden) gives a vague idea of what the DMK thought about the economy. Its main concern at that time was to secure the Tamil Nadu market for the emerging Tamil industrialists. Some scholars have argued that DMK gave up its separatism under pressure from these industrialists who had become interested in the all Indian market.

MGR saw his opportunity when he broke away from the DMK, in the vast majority of the rural masses who had not benefitted very much from the capitalist oriented development strategy.

During his 12-year rule he built up a heavily subsidized economic system. Karunanidhi tried to gradually dismantle this system but his defeat has shown how far it is politically entrenched. Jeyalalitha's first major announcement after she became Chief Minister was the ban on the cheap packeted arrack which had been introduced by the DMK to increase state revenue. The ban will cost the Tamil Nadu treasury Rs 3.22 billion. The deficit is already 3 billion. A proposed price subsidy for rice might cost a similar amount. Jeyalalitha has said that she immediately needs 12 billion rupees to tide over the current crisis.

She has had discussions with Narasimha Rao and Finance Minister Manmohan Singh to persuade the Central government to come to her rescue. But Delhi can no more afford to pump in so much money into the Tamil Nadu Treasury even if it is to save a strong ally like Ms. Jeyalalitha. Delhi's inability to subsidize the economic programme of the ADMK which is tailored to fit its populist goals will have definite and long term repercussions in the politics of Tamil Nadu. Prices of many essential commodities have already begun to skyrocket, despite the ADMK government's much publicized but frantic efforts to rationalize market prices.

Jeyalalitha has also to worry about the farmers - another large constituency - who strongly opposed the DMK for not raising the guaranteed prices at which the State government purchased their crops. Tamil Nadu's sugar cane cultivators were the most vociferous and bitter in their constant agitations against the DMK regime. They demanded that the State should double the guaranteed price for sugar cane.

The ADMK has to appease the farmers to retain the anti-DMK vote bank. But Jeyalalitha has found to her utter dismay that she may not be able to raise the money to do so either from the Central government or the State Treasury. The Cauvery waters crisis gave her an opportunity to blame Delhi for not acting in the interests of a strong political ally, and tell the people of Tamil Nadu that she is unable to deliver the goods because of Delhi has not given her money. She cannot transfer onus on Delhi for too long because she cannot seriously fall out with the Central government if she has to find money to subsidize her economic programme.

If India sets in motion the process whereby national resources are increasingly transferred to private investment and growth and if the wasteful and politicized system of Centre subsidies for stagnant state economies, gradually is depoliticized, the ADMK may find it difficult to sustain MGR's political legacy and Jeyalalitha's immense popularity

Ms. Jeyalalitha is quite mindful of the fact that the Congress 1's first defeat in Tamil Nadu in 1967 was also due to the rising cost of rice.

If India is to continue with its economic reforms Delhi might have to sacrifice the ADMK's economic policy at some point. The ADMK and Congress 1 together secured 59.8% of the votes in this election. The DMK got 30.12% (in the past it has averaged at 42%). The PMK got 6.21% the powerful G.K. Moopanar faction of the Tamil Nadi Congress 1 is now demanding that the party should oppose Jeyalalitha.

A bad economy and a faction ridden ally can affect her plans to crush the DMK for a long time. The DMK can go up to its 42% in the next election, and unless Jeyalalitha tactfully dismantles the populist and anachronistic economic policy of the ADMK, she cannot prevent the re-emergence of the DMK in India's fast changing economic environment and the inevitable compulsions it can create in India's political sphere.