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Jayalalithaa’s populist poll promises can hurt TN in long run, say experts

Tamil Nadu 2016 Updated: May 25, 2016 14:00 IST
KV Lakshmana
KV Lakshmana
Hindustan Times

AIADMK chief J Jayalalithaa got busy on day one as Tamil Nadu’s chief minister, implementing five of her poll promises, including phasing in prohibition.(PTI)

It was smart politics when J Jayalalithaa began her new innings as Tamil Nadu chief minister by making good on several of her poll pledges.

On her very first day in office, she signed a slew of orders: Eight grams of gold for girls from weaker sections getting married, waiving off farm loans and closing 500 state-run Tasmac liquor shops to begin phasing in prohibition.

These were among the big electoral promises that struck a chord with voters and helped Jayalalithaa get re-elected.

But economists say what is good for ‘Amma’ – as Jayalalthaa is referred to by her supporters – may not necessarily be good for the state.

Already groaning under a debt burden of Rs 2.5 lakh crore, the goodies that Jayalalithaa is giving away is likely to cost Tamil Nadu an additional Rs 15,000 crore per annum, according to them.

“This will prove disastrous for the people in the long run. (At this rate) The debt-burden will go up in five years. These are freebies they (people) can do without,” said Prof S Janakarajan, a consultant with the Madras Institute of Development Studies.

Government estimates suggest that the farm loan waiver alone will cost the exchequer about Rs 5,780 crore. Supplying 100 units of free power to every household will make the state poorer by another Rs 1,607 crore.

Read | Jayalalithaa shuts down 500 liquor stores in Tamil Nadu on first day as CM

Prohibition, under which 500 Tasmac liquor shops were shut down as a first step, will eventually hit the state’s revenues, roughly by about Rs 26,000 crore per annum.

Women have been demanding prohibition as liquor sales have steadily risen, from Rs 14,965 crores in 2010-2011 to Rs 26,188 crores in 2015-16.

“We are not against subsidies, or welfare schemes, but freebies will add to the overall cost to the state. If the same money is going into job creating activities, infrastructure, it would give a lasting solution to the common man rather than few free goodies,” said R Ganapathi, an IT entrepreneur and industry expert.

Among the other poll promises that Jayalalithaa made are revision of salaries for state government employees, free mobiles, free laptops with internet connection for 10th and 12th standard students and 50% subsidy for working women to buy mopeds and scooters.

Janakarajan said the new policies will further pull down the state’s economy; putting these into effect will approximately cost Tamil Nadu another Rs 20,000 crore per annum in the least.

Of course, industry sources who estimated the numbers, say all these are rough estimates and the final figures could vary – which means the actual costs could likely end up on the higher side.