Challenges abound for Palaniswami

Palaniswami has to keep AIADMK united, handle caste politics as well as run state reeling from debt

Edappadi K Palaniswami took over as chief minister of Tamil Nadu amid a hue and cry and won a confidence motion within two days even as rival party Dravida Munnetra Kazhagam (DMK) protested and one faction of the All India Anna Dravida Munnetra Kazhagam (AIADMK) led by O Panneerselvam, former chief minister and confidant of the late J Jayalalithaa, claimed he was the real inheritor of the mantle. Palaniswami’s initial actions show that at least where welfare measures are concerned, his approach was in line with the legacies of Jayalalithaa and Panneerselvam.

This was evident even on Palaniswami’s first day in office. Like his predecessors, he announced welfare measures, which were the AIADMK’s poll promises during the 2016 election. However, that’s where the similarities ended. New to his position, he dodged questions from journalists and cut short his first press meet as CM.

As a V K Sasikala faction nominee of the AIADMK, Palaniswami was expected to visit her in Bengaluru, where she is lodged in prison. He has not done so till now. Panneerselvam, on the other hand, had rushed to meet Jayalalithaa in the Bengaluru jail after he took over as CM. This was after a Bengaluru court had sentenced Jayalalithaa to four years in prison in a disproportionate assets case. K A Sengottaiyan, the new AIADMK presidium chairman and state education minister, along with other party leaders went to meet Sasikala on February 28.

Unlike his predecessor, Palaniswami had no inhibitions moving into the CM’s office and using Jayalalithaa’s chair. Panneerselvam, during his three terms, never sat in the CM’s office to show his loyalty to Jayalalithaa. He worked from his office that was designated for the state finance minister.

Palaniswami has got four-plus years to complete his term, long enough for him and the AIADMK to restore the confidence of the public in the government. He has to especially rebut charges that his government is run by a family (Sasikala’s) and he is only a proxy CM.

However, the biggest task for Palaniswami as CM is to keep ministers, Assembly members of the AIADMK and senior party leaders united. Already the exit of important leaders like Panneerselvam, C Ponnaiyan, A P Mani, K Pandiarajan and M Natarajan, who have political clout and influence in Delhi, has weakened the party. 

The second challenge is handling caste politics, which is more pronounced in the AIADMK now compared to that during Jayalalithaa’s period. The Thevar group, to which Sasikala belongs, has controlled the AIADMK till now. The party looks set to split as the Gounder community is becoming strong, say political analysts.

The three most powerful leaders in the party now — Palaniswami, Sengottaiyan and Lok Sabha Deputy Speaker M Thambidurai, who wanted to oust Panneerselvam — are from the Gounder community, which is strong in the state’s western (Kongu) belt. The party has 28 Assembly members from the Gounda community. Panneerselvam is from the Thevar community, which has 20 MLAs while Vanniyars constitute 19 MLAs; 35 MLAs are from the Dalit community.

One big challenge for Palaniswa-mi is the administration of the state, which is under pressure because of debts of more than Rs 2.50 lakh crore; the other is restoring investors’ confidence. In the past five years, Tamil Nadu’s debt has risen 105 per cent from Rs 1.14 lakh crore — the sharpest increase in debt for a large state. Of all the states, only Haryana has beaten Tamil Nadu, with a 141 per cent rise in public debt. Most of Tamil Nadu’s debt is the consequence of Jayalalithaa’s populist schemes for the poor. Other large industrial states such as Maharashtra and Gujarat have seen their debts increasing more modestly — 64.5 per cent and 60.3 per cent, respectively during the same period.

One key element in which neighbour Andhra Pradesh has a big advantage over Tamil Nadu is ease of doing business. AP is ranked number one in ease of doing business; Tamil Nadu has slipped to the 22nd spot. Two decades ago, Tamil Nadu was at number one. 

During the first Global Investors Meet in Tamil Nadu in 2015, commitment of Rs 2,42,160 crore was made. The state government claimed that 62 projects with a committed investment of Rs 63,212 crore were in various stages of implementation. However, no White Paper has been issued by the industries department to back this claim.

The state is reeling under debt thanks to freebies. This will be another challenge for Palaniswami, who signed welfare schemes worth over Rs 3,500 crore on the first day of office.

There is no corresponding trend in tax revenue. According to the 2016-17 Tamil Nadu Budget, tax revenue was estimated to increase to Rs 90,691.87 crore in revised budget estimates for 2016-2017 from Rs 86,537.70 crore as per the revised estimates of 2015-2016.