Tamil Nadu CM Stalin out to prove good politics can be good economics too

Lakshmana Venkat Kuchi *

If I am concentrating on bringing forth the policy making and governance model from down South, Tamil Nadu to be more precise, it is to show that politics, development, and economic growth can go hand in hand.

Proving that good politics and be good economics as well is the Tamil Nadu Chief Minister, MK Stalin, who has been the longest tenured political apprentice in Indian political history as an understudy to his father for nearly half a century.

On the political pitch, Stalin came out from under the shadows of his father and led the party and alliance with the Congress to stupendous political success in Lok Sabha elections, and later captured power in the State in 2021. Yes, the DMK that he leads, also promised freebies as has been the case in Tamil Nadu politics, and in fact most of south India for that matter, welfare economics dominates the political landscape.

But along with alluring enticements in terms of targeted welfare schemes that DMK's opponents, including Prime Minister Narendra Modi and BJP dub as `revadies', what the Tamil Nadu Chief Minister has focused on is a governance delivery model that is powered by policy making tweaks to strengthen the already progressive State and its inclusive social welfare programmes touching the lives of the poor and needy in the State.

But it is not just social welfare that Stalin's leadership is making his own interventions—in terms of giving direction and depth to the various programmes and policies of the Tamil Nadu Government, and at the same time raising voice for the rightful share of the State's dues from the Central Government -whether it is the GST dues or its rightful share in projects and programmes of the Central Government.

Ever since he assumed office after leading his party to victory in the 2021 Assembly elections, Stalin brought about a refreshing change in approach to politics that till the time witnessed DMK and its arch-rival AIADMK treating each other like sworn enemies. But Stalin was first off the blocks and paid rich tributes to AIADMK supremo J Jayalalithaa and put up a poster at Marina beach when she passed away.

Taking over the reins of office at a critical time in India's fight against the pandemic, Stalin ordered free treatment of Covid patients in both Government and private hospitals, slashed milk prices by Rs 3 per litre, gave free travel for women in Government buses, and released the first tranche of cash payment of Rs 2,000 each to every rice ration cardholder in the State.

Bang in the midst of a raging second wave of the pandemic, Stalin had to tone up the governance delivery mechanism and also check party cadres, earlier known for their unruly behaviour when in power. What Stalin did was to bring in a technocrat politician to handle finances of the State Government and to weigh in on development and growth issues — the key for prosperity and progress.

Palanivel Thiagarajan, a graduate from MIT, a former banker, has already shown how to bring the finances under control and claims that on all parameters, TN State was performing way ahead of the National averages, and also in certain aspects better than the Central Government.

On the administrative front, Stalin has assembled a crack team of officials to assist him in governance delivery as also to implement the promises he made to the electorate, and spur all-round economic growth of the State.

What not many outside the State know is that Stalin brought in an IAS officer of great repute to head the bureaucracy, who has good equations with the officialdom in the Central Government, always a necessity for a State Government for maintaining good relations with the Centre.

Now within just one year, the State is readying to be able to reap full benefits from the India Australia Free Trade Agreement that has come into force some time back. Chief Minister Stalin's determined focus on policymaking and governance initiatives are beginning to show results as the State appears poised to maximise benefits from the economic and trade treaty.

Tamil Nadu also happens to be the one State that is ready to reap the benefits accruing from the agreement with its good policies, efficient infrastructure, and employable workforce. Tamil Nadu is well positioned to benefit from the India-Australia Economic Cooperation and Trade Agreement (ECTA) in its key focus areas of Agriculture, Food, Leather, IT & ITES, and Pharmaceuticals.

This agreement paves way for greater investments from Australia into Tamil Nadu that will obviously lead to employment generation for both skilled and semi-skilled workers. There will be greater collaboration on research, development, and innovation, apart from more favourable terms for students for their visas and work, because of this focus.

Tamil Nadu is also to benefit from the exports, especially several labour-intensive goods like textiles and apparels, agriculture, leather, footwear, furniture, jewellery, engineering, pharmaceuticals, and medical devices as they will gain duty free acceptance in Australia. And quite logically, it would be reasonable to expect increased investments in the above sectors in Tamil Nadu.

Tamil Nadu has traditional strength is exports in these sectors and the State needs policy tweaks to take full advantage of this agreement. The biggest advantage the State has in comparison to few other States is that it has a thriving education & research ecosystem.

Besides, the State already has focused agencies like Guidance TN (for investments & exports), FaMe TN (for MSMEs) and TANSIM (for Startups & Innovation) which can ensure that the State's industry can fully reap the benefits.

Clearly, the focus of the Government appears to be to leverage its strengths in industrial development, export growth and investment promotion. Just to cite an example of what can happen in the immediate future as regards the India-Australia pact for Tamil Nadu, for example in the garments and textiles sector, is that its market share in Australian market will grow substantially.

Other segments of Tamil Nadu like gems and Jewellery, leather and non-leather footwear segment, handicraft, auto parts and engineering products can also gain larger market share in that country. Exports from Tamil Nadu to Australia was $384 million in FY 21-22 and is already at $322 million in the current financial year from April to October. It is expected to cross $500 million during this fiscal.