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Like Manmohan Singh, Tamil Nadu’s Finance Minister PTR Palanivel Thiaga Rajan has learned quickly that good economics is bad politics. Much of the promises in his White Paper on the state’s financial position, regarding re-structuring and minimizing the amount of freebies and subsidies, would have to wait at least till elections to rural local bodies in nine districts are held in October and the urban local bodies of the State perhaps by December.

The ruling DMK has put a hold on Thiaga Rajan’s plan to revise electricity and water charges besides property tax as also levy tax on agricultural income, with elections round the corner.

In view of murmurs on one side regarding the delay in implementation of various sops as promised in the DMK election manifesto, and the possible backlash if taxes were hiked before these elections, chief minister M K Stalin has chosen to play it safe and not rock the boat at this juncture. There has been a three-rupee reduction in the price of petrol. Further, promises have been made that other populist measures would be implemented one by one, in due course as the financial situation improves in a few months’ time.

Therefore, all of Thiaga Rajan’s intentions have to wait for the dawn of the year 2022 when the DMK government hopes there would be significant inflow into the State treasury.

A hike in bus fares and electricity charges could be met with hostility as people are already facing a resource crush due to loss of jobs or underemployment in the pandemic period. The purchasing power of the people has visibly dwindled, and most sections of the people have chosen to tighten the belt, and avoid expenditure wherever possible. The ruling DMK has referred to the scheme for free bus travel for women in urban areas, and claimed that it had partially met the expectations of the people. Even here, womenfolk, though welcoming the move, have pointed out that this concession is limited to the ‘white’ buses with ordinary fare, and not implemented in the so-called Deluxe buses. The cash-strapped Tamil Nadu Electricity Board would, of course, hope that it would get better revenue from the domestic and the agricultural sectors in the months to come. However, the DMK is wary of the fact that a rise in electricity tariff would provide a handle to the opposition parties to mobilize public opinion against the Stalin government.

Second-rung leaders of the DMK have been suggesting to their leader M K Stalin to push the White Paper under the carpet, and allow gradual implementation of welfare measures to maintain the momentum of a lead over its rival, the AIADMK. While economists have hailed Thiaga Rajan’s White Paper and called for earnest steps for implementation of its recipe to overcome the financial crisis, DMK’s legislators would like the government to do the opposite, and not displease the vote-banks.

Thiaga Rajan, who has spent considerable time abroad, both for higher education and stints with corporate companies, has learnt quickly that  he cannot have his way regarding speedy reforms, and that he must bide his time.

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