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N. Ramakrishnan

CHENNAI, Dec. 30

WITH Ms Jayalalithaa back at the helm of affairs in Tamil Nadu in the early part of this year, the uncertainty and the general drift in administration that was witnessed in 2001 ended.

Ms Jayalalithaa led the AIADMK to a resounding victory in the general elections in May 2001 and continued in office till September when she had to step down following a Supreme Court ruling. From then till March 2, 2002 Mr O. Panneerselvam, a lesser-known minister in her Cabinet, was the State's Chief Minister, and that is all that could be said of his tenure.

Shortly after being sworn in as Chief Minister in March last, Ms Jayalalithaa made it clear that putting the State's economy back on the rails was her Government's top priority, for which the administration would also be toned up. The frequent reshuffle of bureaucrats, especially the chief secretary, and the ministerial changes, however, have not helped in this.

True to her assertion, Ms Jayalalithaa did initiate action on a number of fronts, putting the State on the path of reforms. For one, the Tamil Nadu Electricity Regulatory Commission was made fully functional and the Tamil Nadu Electricity Board also filed its first tariff revision petition. The most significant aspect of the petition is that the electricity board proposes to levy tariffs on agricultural pumpsets and hut dwellers, two sections of consumers that have been supplied power free for some time now.

As expected, the TNEB's tariff revision proposal met with a lot of opposition, from almost all sections of consumers, with most political parties being vehement in their opposition to charging the farm sector. The electricity board had sought the tariff revision effective December 1, 2002 but it is yet to respond to the points raised at the public hearings, after which only the regulatory commission will give its ruling on the petition.

The 250 MW lignite-based ST-CMS power project, the fifth private power project in the State, went into commercial operation as scheduled in December.

The TNEB also signed an agreement with the National Thermal Power Corporation to set up a 1000 MW coal-based project, exclusively for Tamil Nadu, at Ennore, on the outskirts of Chennai, while it proposes to enter into a similar MoU with the Neyveli Lignite Corporation for a 500 MW coal-based project in Tuticorin.

Although the Government made the regulatory commission fully functional, it is yet to make much progress in reforming the power sector. There has been talk of unbundling the TNEB, but the Government is yet to outline its intentions as far as this issue is concerned.

True to its assertion that it will take steps to tackle the financial crisis confronting the State, the Jayalalithaa Government also made major changes to the rice procurement policy for the public distribution system, all of which are expected to result in savings of almost Rs 700 crore a year.

One aspect that continues to worry the Jayalalithaa Government is the lack of fresh investment, especially in the manufacturing sector. It is believed that the Chief Minister herself has been in touch with some former bureaucrats to find out the reasons for this.

The Jayalalithaa Government also moved on the disinvestment front by inviting expression of intent for advisers to help the Government sell its stake in the Tamil Nadu Industrial Explosives Ltd.

Earlier, the Government had talked in terms of constituting a disinvestment commission, like the one the Government of India had. It has now given up this idea and has decided to appoint advisers for the units that it will put up for sale.

The Government has the S.V.S. Raghavan Committee reports to go by for its disinvestment programme. More importantly, the Government initiated moves to privatise the transport sector.

Agriculture is a sector that is of worry for the Government. A poor monsoon affected both the kuruvai and the samba crops, resulting in a drop in both the area under cultivation and rice production.

For the April-October 2002 period, the area under paddy cultivation (both kuruvai and samba) dropped to 7.29 lakh hectares from 11.24 lakh hectares for the same period last year, a 35.14 per cent drop. Rice production came down by 35.27 per cent, from 34.96 lakh tonnes in April-October 2001 to 22.63 lakh tonnes in the same period this year.

The year that is drawing to a close will be remembered for the bitterness between Tamil Nadu and Karnataka over sharing of the Cauvery waters, and the new low in inter-State relations.

The Government unveiled a new IT policy during the year while outlining a draft policy for the now booming IT enabled services. The Government hopes to capture a substantial share of the IT enabled services. A second software park, modelled on the lines of the Tidel software park, is to be put up jointly with Ascendas, a subsidiary of the Jurong Town Corporation of Singapore.

Trade and industry associations have been repeatedly impressing upon the Government to improve the State's infrastructure on a war footing, involving the private sector in a big way. Till this is done, they have pointed out, there is little hope of Tamil Nadu attracting any fresh investments.

For instance, the Old Mahabalipuram Road, which is called the IT superhighway as a number of IT companies are located on this stretch, needs to be upgraded to motorable standards immediately.

Another issue that is worrying the industry is the Government's stand on switching over to a value added tax regime. The industry is keen that the Government adopt VAT along with the other States, while Tamil Nadu has made it clear that it stands to lose a large amount of revenue if that happens and that there is no question on switching over to VAT till the Centre compensates the State for this loss.

Meanwhile, revenue through sales tax collection continues to be buoyant with a 13.5 per cent growth during April-October 2002 over the same period last year. The scope of entry tax was widened to bring under its ambit a large number of items.

The Government attempted to bring in retail sales of rice and other essential commodities under the tax net through a resale tax, but gave it up on the grounds that it affected the common man.

The industry hopes that the Government will concentrate on improving infrastructure in the year ahead and outline some bold moves for involving the private sector in a greater way.

It also hopes that the reform process, initiated in a small way through the proposed privatisation of the transport sector and the changes to the public distribution system as also the intended disinvestment in State-owned enterprises, will be taken forward in 2003.

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