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The Tamil Nadu Sop Opera: How Political Freebie Culture Has Saddled State with Debt

DMK chief MK Stalin (L), and Tamil Nadu deputy CM O Panneerselvam (C) and CM EK Palaniswami from AIADMK release manifestos. (Photos: PTI)

DMK chief MK Stalin (L), and Tamil Nadu deputy CM O Panneerselvam (C) and CM EK Palaniswami from AIADMK release manifestos. (Photos: PTI)

The state debt is likely to cross Rs 5 lakh crore in 2021-22 partly due to the practice begun by Karunanidhi, perfected by Jayalalithaa, and persisted with by OPS.

What M Karunanidhi started in 2006 has become a part of Tamil Nadu political culture now. There are many ways to define it, like empowering the needy and helping in justifiable wealth distribution in the society marked with inequality. But the central theme has always been to lure the voters.

The result: rising annual state debt in Tamil Nadu since 2006.

When Karunanidhi came to power in 2006, the state had a debt responsibility of Rs 57,457 crore.

2006 Tamil Nadu state assembly elections
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The freebie culture that ran parallel with Tamil Nadu electoral politics for decades, saw a new high in 2006 with DMK’s M Karunanidhi ushering in a ‘free colour TV’ culture. The DMK manifesto announced free colour televisions and power to farmers and weavers. To appeal to the poor, Karunanidhi promised rice at Rs 2 per kg, two acres of land for the landless, free gas and Rs 300 for the unemployed and Rs 1,000 maternity assistance to poor women for six months.

DMK formed a minority government after the polls and Karunanidhi’s government spent a big chunk of revenue either through taxpayers’ money or through debt to finance these schemes. Also, once in power, the price of subsidised rice was finally reduced to Re 1 per kg by the Karunanidhi government.

Rs 1,01,349 crore: The state debt of Tamil Nadu in 2010-20112011 Tamil Nadu state assembly elections

J Jayalalithaa decided to enlarge this populist canvas in the 2011 assembly polls. Karunanidhi’s colour TVs saw their space being given to free mixers and grinders and free laptops for class 11, 12 and college students. Poor fishermen were promised Rs 4,000.

She chose to target women in her freebie culture that resulted in an unexpected victory for her in the 2016 assembly polls, something that defied the trend in the state since 1984 that no ruling party had won an election.

Four grams of gold as marriage assistance was promised along with Rs 50,000 as wedding assistance for women with educational qualifications, Rs 12,000 for pregnant women, 60,000 cows for 6,000 families and free school uniforms and a pair of shoes each for children. For every BPL family, she announced 20 kg free rice and 20 litre free water and capped it with promising free housing to be built for 3 lakh BPL families.

Her party won 150 out of 234 seats in the state assembly and formed the next government.

2014 Lok Sabha elections in Tamil Nadu

AIADMK under Jayalalithaa came out with a manifesto. She promised that her government will continue the welfare schemes as promised earlier.

She also launched Amma budget canteens in 2013 to provide highly subsidised food, an experiment that has been replicated across the country now. Jayalalithaa swept the Lok Sabha elections, winning 37 out of the 39 seats in the state. In June 2014, after the Lok Sabha elections success, she launched the Amma Baby Care Kit for new mothers.

Rs 1,81,036 crore: The state debt of Tamil Nadu in 2014-152016 Tamil Nadu state assembly elections

To retain her government in the upcoming state assembly polls, in the run-up to the 2016 elections, Jayalalithaa decided to go further. The AIADMK manifesto promised a waiver of all farm loans, free mobile phones for all ration card holders, free electricity up to 100 units to every household, employment promise for one member of every family, Rs 5,000 to poor fishermen, and free power for handloom weavers. The manifesto retained the free laptop scheme and added a free internet connection to it.

To specifically target women, eight grams of gold was announced as marriage assistance. Financial assistance for women was promised to be increased to Rs 18,000 and working women were promised 50% subsidy on purchasing a scooter. The promise to help students got more freebies under the umbrella: free textbooks, free stationery, and free breakfast beyond the 2011 promise of free uniform and a pair of shoes.

Defying the trend, Jayalalithaa won the polls for a second time and as per a CSDS post-poll analysis, women voters were a decisive factor behind it. AIADMK, in fact, got 10% more women votes than DMK.

Jayalalithaa, in the first year of her second consecutive government, announced:

  • Rs 5,780 crore for farm loan waiver
  • Rs 1,607 crore for free electricity up to 100 units
  • Rs 308 crore for gold for educated brides
  • Rs 19.08 crore for free power connection to handloom weaver

Debt as percentage of GSDP in Tamil Nadu continuously increased during Jayalalithaa’s tenure as Tamil Nadu CM, from 16.92% in 2011-12 to 20.27% in 2016-17.

E Palaniswami who succeeded Jayalalithaa as Tamil Nadu CM after her demise in 2017 continued the freebie template run. Amma canteens, now over 400 in number across the state, employ thousands of women. These canteens, in fact, became a lifeline during the pandemic days. According to an estimate, around 4.5 lakh people visit Amma canteens every day just in Chennai.

The result: the state debt that was around Rs 1 lakh crore on March 31, 2011, has now jumped thrice to around 5 times.

Rs 4,85,502 crore: Tamil Nadu state debt, as on March 31, 2021

The current debt-GSDP ratio has further gone up, to 21.83%.

The state debt is expected to cross Rs 5 lakh crore in 2021-22.

It is expected to be Rs 5,70,189.29 crore on March 31, 2022.