‘TN industry hurt by AIADMK turmoil, govt’s attitude’

The cost of doing business in Tamil Nadu is going up, with even routine clearances being delayed and the State government adopting a “confrontationist approach” to industry in an atmosphere of political uncertainty, according to concerned business representatives .

Even manufacturing units in operation that need clearances on an annual basis have been affected, and approved projects are delayed, say a cross-section of industry representatives.

Recent changes in environment rules by the Centre allow for five-year clearances as against annual clearances required earlier, but the costs for securing approvals have gone up as they need to go higher up the power ladder, say industry sources.

In Andhra Pradesh, which is increasingly drawing investor interest, “we get five-year clearances over e-mail,” said a Chennai-based industrialist who did not want to be named.

But given the fluid political situation in the State, the industry is wary of incurring “unwanted expenditure”. “Forget about a change in government, what if there is a change in the faction heading the government?” asked an industrialist, referring to the infighting in the AIADMK and doubts about the government’s stability.

Tamil Nadu is going through a turbulent phase, given the power struggle within the AIADMK. The party, which was known for its monolithic structure, is now divided among three factions: one led by O Panneerselvam, former Chief Minister; the second led by Party General Secretary VK Sasikala and her nephew TTV Dhinakaran, Deputy General Secretary; and the third, which is in power, led by Edappadi K Palaniswami, Chief Minister.

There is a clear lack of control within the party that was once known for its `military discipline’ under former General Secretary J Jayalalithaa, say those familiar with developments.

Industrialists in Tamil Nadu are, in particular, concerned over the roughshod way in which some Ministers have dealt with industry. They point to two instances: dairy and sugar.

Dairy Development Minister Rajenthra Bhalaji recently bad-named the entire private sector dairy by accusing them of selling adulterated milk. A senior executive in an Andhra Pradesh-based brand said, “this happens only in Tamil Nadu.”

He pointed out that in his home State, he is in competition with a brand that is owned by the family of Chief Minister N Chandrababu Naidy. “But I am not scared,” he said.

In Karnataka, private dairies are in competition with the second-largest dairy cooperative in the country. “We compete in the market. I am not worried,” he said.

But in Tamil Nadu, “dealing with the government is different,” he said cryptically.

According to participants at a recent meeting with sugarcane farmers and sugar mills, Industry Minister MC Sampath similarly sold private sector sugar mills short by saying that the numbers cited by them could not be trusted.

He insisted that they pay the higher State Advised Price over and above the statutory price set by the Centre for sugarcane. Exasperated by this public articulation of distrust, private sector sugar mills had declined to participate in further tripartite meetings in the absence of a pragmatic approach to sugarcane pricing.

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