Why Tamil Nadu’s freebie culture works

It has combined the cult of personality politics with real economic growth


Illustration: Jayachandran/Mint
Illustration: Jayachandran/Mint

In the late 1970s and for much of the 1980s, M.G. Ramachandran reigned as Tamil Nadu’s most iconic chief minister. At one point in his tenure, what was then Madras was suffering from a severe water shortage. The Telugu-Ganga agreement with Andhra Pradesh was supposed to address this. MGR, however, failed to follow through. Instead, he announced a scheme to distribute plastic water containers to families below the poverty line.

That kind of populist chutzpah has characterized much of Tamil Nadu’s politics for the past four decades. The laundry list of freebies AIADMK chief and current chief minister Jayalalithaa announced last week—from a waiver of all farm loans and free laptops for Class X and XII students to free cell phones for all ration card holders and government reimbursement of education loans—shows that she deploys it as well as her mentor MGR ever did. Will it, however, be enough to win her the state polls on 16 May?

The peculiar nature of Tamil Nadu’s political economy complicates the question. Conventional wisdom dictates that rampant populism, autocratic administrations and widespread corruption—all endemic to state politics since MGR’s reign, with little to choose between the AIADMK and the M. Karunanidhi-headed DMK that have alternated terms since—are antithetical to economic growth and human development.

But in Tamil Nadu, they have always coexisted comfortably: it has the second largest economy among all states and the third highest per capita income. Its human development index is not quite commensurate—the Institute of Applied Manpower Research’s 2014 report put it at seventh among the states—and yet it is comfortably more than the national average and has trended steadily upwards since 2000.

In part, the AIADMK and DMK have benefited from the legacy of Periyar and C. N. Annadurai’s Dravidian movement. Its creed of rationalism and social egalitarianism created a markedly different form of caste politics than seen elsewhere—mobilizing Dalits and other backward castes, undercutting hierarchies and transforming social indicators.That had obvious implications for economic advancement, as per the endogenous growth theory.

But as The Paradox of India’s North-South Divide by Samuel Paul and Kala Seetharam Sridhar shows in comprehensive detail, the real uptick in Tamil Nadu’s growth story has taken place from the 1980s onwards—precisely the period when MGR, Karunanidhi and Jayalalithaa took control of the state and the political rot set in.

There are a number of reasons for the surge: Tamil Nadu’s high level of urbanization and large manufacturing and service bases because of low rainfall making agriculture relatively unviable; high levels of technical education; middling to high social sector spending; an effective public distribution system. But they all require effective governance as a prerequisite.

There’s the rub. For all the negative press it draws, the state’s cult of personality politics—stemming from the Dravidian movement’s using cinema to spread its message—has had unintended advantages.

Jayalalithaa and Karunanidhi’s imperious style of functioning, distasteful as it is in a democratic set-up, has also meant a streamlined decision-making process. And their exalted status in the state’s political life means that Tamil Nadu has remained essentially a two-party system, promoting policy and economic stability. The notorious freebie culture is the flipside—when politicians are treated as near-deities, munificence is expected.

This time around, however, there are cracks in the old order. Karunanidhi’s age sidelines him to an extent; his son and chosen heir M.K. Stalin cannot hold the stage as his father did. And caste politics is finally starting to converge with the form it takes elsewhere.

Periyar’s anti-Brahminism concentrated power among a handful of castes with large populations such as the Thevars and Gounders, leaving Dalits and other less dominant castes out in the cold. The fissures that created have been widening over the years. Small caste-based parties could play a larger role this time around than they have in the past.

The economy is also showing signs of strain. According to an IndiaSpend analysis of state budgets, Tamil Nadu has seen the maximum increase in debt over the past five years, an unhealthy trend even if its debt to gross state domestic product (GSDP) ratio remains below the national average at 20%.

Likewise, the ratio of its interest payments to revenue expenditure has risen from 10.5% in 2012-13 to 11.6% in 2014-15—one of the few states to show an increase. It has also posted a revenue deficit for the third year in a row now—0.7% of GSDP—the longest such streak in a decade.

And then there is the geographically lopsided nature of the state’s manufacturing sector, with 60% of the industrial production happening within 150km of Chennai. The regions beyond face infrastructure problems, particularly power, that are growing in importance as competition for investment from neighbours like Andhra Pradesh grows.

Stalin and other state politicians like Anbumani Ramadoss have accused Jayalalithaa of running the economy into the ground and trying to buy off the voters with freebies instead of growth. The hypocrisy of their argument aside, their rhetoric on doing away with freebie culture and delivering real growth is decidedly unusual—particularly in the DMK’s case. Could this herald, finally, a shift from the entrenched political model?

Predicting the poll results in Tamil Nadu—Winston Churchill’s proverbial riddle wrapped in a mystery inside an enigma—is a mug’s game. The past four decades have shown that there are no easy binaries in the state’s politics. But even if Jayalalithaa wins, she might find that an increasingly fractured and demanding polity will no longer be as easy to buy off as it has been in the past.

Can Tamil Nadu’s freebie culture survive? Tell us at views@livemint.com

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