Amma is everywhere and Amma will be everywhere. Tamil Nadu chief minister J Jayalalithaa is rolling out populist schemes that remind her vote bank of Amma’s benevolence, in good health and in sickness. Her focus is assembly elections and she wants to make her All India Anna Dravida Munnetra Kazhagam (AIADMK) invincible.

As the 2016 election approaches, Jayalalithaa, known as the mother of populist schemes, is unveiling one scheme after another. The latest being Amma mobile phone for community self-help group trainers in the state.

The Amma mobile phone scheme promises to improve working of SHGs in the state. But, if implemented properly, it could bring lakhs of women under the influence of Jayalalithaa. Tamil Nadu has 6.08 lakh SHGs with a membership of 92 lakh women. And the scheme could be a game-changer, politically and administratively.

Under the scheme, initially as many as 20,000 trainers will be given smartphones with a specially developed mobile application. Later, these phones may also be provided to the SHG members.

With the app the trainers would be able to update details of attendance of members, savings, bank loans, internal loans, interest and assets created. The trainers supervise 20-25 groups each.

Sampath Kumar, additional director of Tamil Nadu Women Development Corporation, told Governance Now that the mobile phones would have software in Tamil to make it easier for the trainers to operate. It would be linked to the banks, added Kumar.

Populist schemes are not new to the state. But today many are of the view that Jayalalithaa is perhaps the only Indian politician who has effectively built up a personality cult through her schemes. In 2014 Lok Sabha polls,  AIADMK’s landslide victory – the party bagged 37 of the 39 seats in the state – is attributed by analysts partly to the growing traction of Jayalalithaa’s populist measures.

But how far this can sustain? Political commentator Gnani Sankaran said, “It is a question of getting alternative to the AIADMK. It is not just that people love AIADMK so they are bringing the party to power. The point is these schemes are rolled out to garner votes and people are aware of it.” Nonetheless, unveiling these schemes is going to help the ruling party in the upcoming assembly elections. More so when the opposition’s credibility is so weak, said Sankaran.

Surprisingly, the main opposition party DMK, which is considered to have opened up the way to freebie culture in the state, has not promised sops yet ahead of 2016 election. MK Stalin, the party treasurer and possible chief ministerial candidate, is trying to reach out to the masses, carrying out tours in the state portraying himself as an accessible and approachable politician. For the party that is facing a negative vibe from the people this could possibly be the only option to fight against Jayalalithaa in the upcoming election. 

One cannot deny that Brand Amma is emerging as the mother of all welfare schemes but at the same time it is argued that some of these measures are causing burden to the state exchequer. It is understood that subsidies constitute more than 37 percent of Tamil Nadu’s revenue spending. However, government officers claimed that the welfare schemes are not adding burden on the state exchequer.
Chennai-based advocate Subramaniam Balaji disagrees. He said that these are causing loss to the exchequer. Balaji who has been challenging in the court the culture of freebies that political parties announce to gather votes added, any public service should be on a no profit no loss basis.

Referring to Amma Unavagam or Amma canteens, Balaji said these low-cost eateries currently in operation are located on land or in buildings belonging to the government. Amma canteen comes under the Chennai municipal corporation. Every day the minimum loss for the corporation is '40 lakh, he added. “I have been opposing the Amma Unavagam concept. The public distribution system (PDS) is already in place. Beneficiaries get free rice, and subsidised pulses, oil, etc under PDS. So where is the need for the government to offer food at such low prices?” he asked.

“In 2006, when the DMK government announced free colour TV sets for the poor, I had opposed it too. I took the matter to the comptroller and auditor general (CAG) as funds earmarked for SC/ST and other heads were being diverted for freebies. But I did not get any reply from CAG,” said Balaji.

So far it has been a smooth sailing for the Jayalalithaa government. There is no immediate threat to it, as the DMK empire is already ailing and there is no alternative as such.

However, industry observers felt that in Jayalalithaa has been putting focus on welfare measures for the poor and not much on investment. “Mere freebies won’t work. She has to keep in mind the interests of the industry as well,” said a city-based industrialist. Even at the Global Investors Meet held in early September in the state capital, there was not much emphasis on promoting industries, felt some industrialists. At GIM, the state attracted '2.42 lakh crore investment proposals. “But memorandums of understanding (MoUs) don’t mean much, and a lot will depend on actual delivery. I think Tamil Nadu will still attract investments but anecdotally, it looks like other states are taking away the share,” pointed out another industrialist.

Industry observers felt, the attempt of the government in promoting things under the brand of the chief minister can be seen as a social intervention of sorts in key areas, and on the positive side, this could be seen as a way of keeping market prices in check. However, there are serious reservations on how this is funded. For instance, main revenue sources for the state, other than regular VAT, are real estate and liquor, and the statistics suggests that both are severely affected. Hence, the financial situation of the government remains in stress as a result of these activities. There is some merit in the Amma canteen scheme as that is food subsidy but when it comes to cement, it appears the government is asking cement companies to sell at low prices. If this kind of thing were to be extended to industrial commodities say steel, and in future to finished products like motorcycles, then one can imagine where it is all leading to.

“Tampering with market forces is going to be counterproductive in the long run. And the experience of governments being in the business of ‘being in business’ has been a disaster everywhere,” said an industrialist not wishing to be quoted. In other words, the key concern is where the line will be drawn and who will draw the line.

It is intuitive that since everybody has a vote, the politician who manages to give the maximum amount of goods and services free to the maximum number of people should always win, but who will pay the bill, he asked.

“Look at the latest World Bank ranking of states in ease of doing business. TN is 12th, this appears to be a forward-looking rank as the parameters are current (and not past) statistics. Many NDA-ruled states are at the top. Even Uttar Pradesh is ahead of TN, which is bad news,” another industrialist said.

So the point is there is competition among states for business and other states seem to be more proactive. Still, TN figures on top in development parameters, and the state share of GDP is still high and intact that is because of the enormous starting advantage that TN has and it takes years for that to erode. The concern is that if ease of doing business slips, then the ranking slips as well.

shivani@governancenow.com

(The story appears in the November 1-15, 2015 issue)