The Hindu : Tamil Nadu News : The two courses before govt.

Online edition of India's National Newspaper
Sunday, May 16, 2004

Tamil Nadu

Tamil Nadu

The two courses before govt.

By V. Jayanth

CHENNAI, MAY 15. The All-India Anna Dravida Munnetra Kazhagam (AIADMK) Government of Chief Minister Jayalalithaa has completed three years in office. There was no celebration to mark the event because of the drubbing the AIADMK-Bharatiya Janata Party combine received in this week's parliamentary elections. No public meeting, as in the past, to highlight the "achievements" of the administration.

The corridors of the Secretariat are agog with rumours of a major shake-up in the bureaucracy, but nobody wants to be seen discussing `Verdict 2004'. Government employees, however, are not hiding their happiness at the outcome.

Ms. Jayalalithaa is scheduled to leave for Hyderabad on Sunday for a break and the expectation is that she will return with a clear plan for the next two years — both an immediate action plan and a framework of corrective measures to win back the people's confidence.

Political and official circles say the Chief Minister has at least two options. The first will be the easier way of rolling back the major, well thought-out economic and fiscal reforms implemented over the past three years. The tougher option is to slow down the reforms, but stick to the chosen path - going in for "reforms with a human face".

Option one

The talk in AIADMK circles even now is that the Chief Minister lent her ears more to officials than to party functionaries on matters of policy. Because of the "grave fiscal crisis the State was in," they could not halt the reforms. Though the government did loosen its purse strings towards the end, it was "too late".

If the government is to follow this path, it may be very easy - just undo all that has been done in three years. The public distribution system can be opened up again; the system of reimbursement of power charges can be extended to all farmers; all curtailed benefits can be restored to government employees and the administration can go slow on "user charges" for the utilities sector.

But this will lead to another financial crisis, though the government can take the line that it inherited a "mess" and leave it in a "mess" at the end of five years.

Option two

There can be a fresh look at the government's finances and a new blueprint can be prepared for continuing the reforms, with a human face. After considerable effort and belt-tightening, the government has found the resources for development programmes and secured clearance for a more than Rs. 2000-crore road sector project for World Bank funding. A clutch of programmes is now under various stages of discussion for multilateral funding.

All these have strings attached - conditions linked to the sanction of loans. The World Bank, the Asian Development Bank or any other agency will expect the State government to follow certain norms and fiscal discipline. In other words, they will only nudge the government further on the path of reforms. Having agreed to some of the conditions already, it may be difficult to wriggle out at this stage. Some commitments have already been given by the government and have to be honoured.

That is why economists advocate "the middle path," on which the government can push ahead with certain reforms and also ensure that it does not hurt the "poorest of the poor". The targeting of subsidies, as the government did in the ration cards scheme, is an illustration they offer. While weeding out those who do not need subsidy, the cards can continue to "protect" the really poor families. The reasoning is that the Rs. 5000-ceiling set for eligibility for subsidised rations is "unrealistic" in the present economic scenario. Similarly, there has to be a "reasoned approach" to other areas of reform.

People cannot be taken for granted

One clear message `Verdict 2004' has thrown up for the State government is that the people - and every section - cannot be taken for granted. When decisions affect them personally and hit them where it hurts, they will not take it lying down. And any government has to be responsive to what the people say. It may be Hobson's choice for the AIADMK Government but when the Assembly reconvenes next month for the budget discussions, a clearer picture may emerge.

Major issue

The major issue in this election was drought — water crisis. Unless there is a dramatic change in the situation on this sensitive issue, there can be no change in the mood of the people. Sources in the government argue that the present condition is not its making and that neighbouring Andhra Pradesh and Karnataka are also going through a similar crisis. That can also explain the vote against their Chief Ministers — N. Chandrababu Naidu and S.M. Krishna— , they point out.

Printer friendly page
Send this article to Friends by E-Mail

Tamil Nadu