The Hindu Business Line : What the mandate means for Jayalalithaa Govt

WHEN the DMK President and former Tamil Nadu Chief Minister, Mr M. Karunanidhi, walked out of the National Democratic Alliance Government at the Centre in December last year and hitched his party with the Congress (I), many wondered what the DMK chief had in mind. At that time, there were not many who gave the Congress (I) a chance of coming back to power at the Centre.

The DMK had been a member of the NDA Government led by Mr Atal Bihari Vajpayee with Mr Karunanidhi's nephew, the late Murasoli Maran, getting the high profile Commerce portfolio. Apart from occasional spats with the State unit of the BJP, the DMK had enjoyed a good rapport with the NDA with Mr Karunanidhi himself having a personal equation with the Prime Minister.

Whatever the reasons trotted out by Mr Karunanidhi for quitting the NDA, it is apparent that he was getting ready for a larger stakes game - Assembly elections in the State, which are due in 2006.

The BJP hardly has a base in Tamil Nadu and continuing with it will be of no use, whereas the Congress (I), the PMK, the MDMK and the two Left parties would give him the much-needed percentages.

Also, quitting the NDA would reaffirm his secular credentials in the eyes of the Left parties, his allies for long.

However, with the election results now out, it appears that Mr Karunanidhi, who will turn 80 this June and who has spent as much time as Mr Vajpayee in public life, had got his arithmetic right. The DMK-led front bagged all the 40 seats in Tamil Nadu and Pondicherry. After quitting the NDA last year, Mr Karunanidhi lost no time in sewing up a broad-based alliance with the Congress (I), the MDMK, the PMK, the CPI (M), the CPI and the IUML. Barring a few hitches in seat sharing, the veteran politician had a smooth ride to the elections.

The campaign of the DMK-led front, named the Democratic Progressive Alliance (DPA), was well focussed, targeting mainly the Chief Minister, Ms Jayalalithaa, and her Government's three-year reign so far. There were enough and more issues for the DPA to keep up the barrage against the Chief Minister.

The chief among them were the water scarcity in Chennai and most parts of the State; the plight of farmers in the Cauvery delta; the reform measures initiated by the Jayalalithaa Government, which the DPA said had resulted in untold hardship to all sections; the action against State government staff, with the employees going on strike after which the Government came down on them harshly by dismissing some 1,000 employees.

The DPA also did not spare the NDA, never mind that three of the seven DPA constituents had been members of the NDA till five months ago.

The DPA also had the advantage of fielding an array of leaders across the State. For the AIADMK, it was Ms Jayalalithaa alone who spearheaded the campaign.

More than all this, the shrewd politician that he is, Mr Karunanidhi had gauged correctly the groundswell of public opinion against Ms Jayalalithaa and had foreseen the anti-incumbency to the NDA. That the points raised by the DPA were purely local issues and would not be solved no matter who came to power at the Centre did not matter during the campaigning.

Over the next few weeks, demands for Ms Jayalalithaa's resignation as also for her Government's dismissal are bound to become louder. Ms Jayalalithaa may well try to escape blame by saying that it was a vote against the NDA and its leadership and not a referendum on her government's performance - an argument unlikely to find many takers, especially among the Opposition parties.

For the BJP, it was a case of bad calculation as its senior leader, Mr Pramod Mahajan himself admitted to a satellite television channel. There were quite a few pinpricks between the BJP and allies like the DMK and MDMK, the POTA being the most important.

As Mr Mahajan admitted, the MDMK leader, Mr Vaiko, had been among the staunchest supporters of Mr Vajpayee and if only the NDA Government had put in place earlier the POTA review committee, which ultimately resulted in the release of Mr Vaiko after almost 19 months in jail, it might have been able to continue with the DMK and MDMK in its fold.

But what does the mandate mean for the State. True, the elections were about national issues. But the voters seemed to have been swayed by local issues. Therefore, the Jayalalithaa Government, which has taken steps to set right the State's finances, may well think that reforms do not go down well with the people.

Also, the debacle of Mr N. Chandrababu Naidu, the former Andhra Pradesh Chief Minister, who was known for his reform initiatives, should still be green in her memory.

The State Government has outlined a medium-term fiscal reforms programme, which calls for tight administrative control and fiscal discipline. In the light of the debacle, Ms Jayalalithaa may be tempted to shelve these plans and worse, come out with populist schemes to regain the lost ground before the Assembly elections due in May 2006.

As it is, Ms Jayalalithaa has gone back on a number of tough decisions. When the State Electricity Regulatory Commission ordered early in 2003 that farmers should be charged for the power they consumed, the Government announced that it would pay a direct subsidy to small and marginal farmers and only the large farmers (those owning pump sets with a capacity of more than 5 HP) needed to pay. But even this was changed and the Government announced that it would give the large farmers the direct subsidy.

So also with the stand it took against the striking government employees. After having taken an extremely tough stance, the Government said it would take back all the employees it had dismissed. Obviously, these decisions did not go down well with the voters. A whole lot of people were angry with the Government and they showed this at the hustings.

A number of crucial issues need to be tackled - unbundling of the electricity board, privatisation of the transport corporations, disinvestment, and fiscal belt tightening.

Will Ms Jayalalithaa have the heart to go ahead with these, will be the question uppermost in the minds of officials as well as industry.

The State has negotiated a $1-billion structural adjustment loan from the World Bank. The proposal is before the Bank's board and a decision is expected shortly. The loan will be in jeopardy if the Government goes back on its reform measures and comes out with populist schemes that can derail the State's finances.

The Government's willingness to go ahead with signing the structural adjustment loan with the World Bank itself is in doubt. Those watching the State's finances and reforms programme expect a lull in the reforms programme at least for the next few months.