Amma Inc

The Tamil Nadu Chief Minister has taken brand extension further than anyone in history—from water to salt to canteens. So what if it’s bad economics?

On a warm, lazy Sunday morning in Chennai, 40-year-old R. Rajaraman cycles as fast as he can, for he does not want to be late for breakfast. The state government-run canteen will soon close and reopen only at noon for lunch.  He makes it just in time: for feather-light idlis and fragrant, hot sambar.

Rajaraman, who irons clothes for a living, does not care what critics think or whether the small eatery he used to frequent before he switched loyalty to the Amma Unavagam (named after the Tamil Nadu chief minister, popularly called ‘Amma’) will lose business.

“Earlier I had to shell out at least Rs 100 for breakfast and lunch. Now it just costs less than 10 rupees for equally tasty fare at a reasonably clean place,” he says.

Be it among istriwallas or white-collar workers, the Amma Unavagam chain, which serves food at highly subsidized rates, is a big hit across Tamil Nadu.

There are 294 such canteens in the state, of which 203 are in Chennai alone.

An idli is priced at Re 1 (though it costs the Chennai Corporation Rs 1.86 to make it). Sambar-rice is Rs 5 a plate, curd rice Rs 3. Around 2.5 lakh people are said to visit the canteens daily. Visitors from other state governments, looking to emulate the model, frequently stroll in too. Recently, a delegation from Egypt also made a trip to Chennai to pick up tips.

The canteen is just one of the more prominent ventures of what we can surely call Amma Inc, a conglomeration of subsidized schemes that the Tamil Nadu government runs, all named after Amma. Amma Inc also markets low-cost salt, packaged drinking water (at Rs 10 per litre), has pharmacies (where medicines cost 10-15 per cent less than elsewhere), vegetable shops, and, has, more recently, launched kits for new-born babies. Tea, theatres and hostels are in the pipeline.

Tamil Nadu politics has always hinged on ‘welfare’ measures and sops. In the mid-fifties, there was the late Chief Minister Kamaraj’s noon-meal scheme to attract children to school, which was expanded by another late CM, M. G. Ramachandran two decades later. Thereafter, the Dravidian parties DMK and AIADMK took the freebie culture to a whole new level by giving away colour TVs, rice, laptops, mixers, grinders and bicycles.

The latest in the list of populist schemes are the ones under the ‘Amma’ umbrella: a new stance adopted by current CM  J. Jayalalithaa, who, in her previous stint at the helm  (2001-2006) was focused on enhancing the efficiency of government departments.

If the long queues at the canteens, vegetable shops and bus terminuses where the water is sold are anything to go by, Brand Amma’s popularity is no flash in the pan.

But critics have questioned whether a  the state government should be donning the role of a market enterprise and competing with private players, instead of restricting itself to a regulatory / interventional role.

Political commentator Gnani Sankaran concedes that government intervention in the drug sector is a necessity. “But instead of getting into drug retail, wherein the government purchases in bulk from large private players which are already making huge profits, the government should have entered drug production,” he says.

Since the state is using existing infrastructure (old, defunct buildings are being converted to canteens) and resources, the freebies and subsidies are not seen as a big drain on the government. The Chennai Corporation has estimated an annual budget of Rs 65 crore for the canteens.

But are they sustainable in the long run ?

A senior official of the Chennai Corporation claims that the canteens are an anti-poverty measure and well within the revenue budget of the state. “For the moment, the government can afford to underwrite the costs and run the schemes at break-even or low profit margins,” says Sankaran. “But where will the money come from in the long term? There is no proper revenue model.”

The bigger issue is of Tamil Nadu’s finances being heavily dependent on liquor sales. Can the state coffers support Brand Amma forever?

This is pure vote-bank politics, notes Sankaran.

And then there is the issue of larger-than-life branding.  Amma’s picture is liberally reproduced on all products and services.

Subramaniam Balaji, a lawyer waging a battle against freebie culture, says the chief minister must not project herself as a brand name at the expense of the government.“A generic name would have been more appropriate and enable future governments to continue, like in the case of TANCEM (Tamilnadu Cement),” he says.

But while critics may carp, with salt, water and vegetables being sold at prices significantly lower than market rates, consumers are not complaining. “I am able to save at least Rs 300 on vegetables every month,” says Paul Jayaprakash, a retired 70-year-old, who now shops only at the state-run Pannai Pasumai Nugarvor Kooturavu Kadai (farm-fresh consumer outlets). “Of course, I have to carefully pick and choose good produce.”

While such welfare schemes are not harmful, the state must pay more attention to infrastructure development, says K. R. Shanmugham, director, Madras School of Economics. “Tamilnadu’s Vision 2023 document talks mostly about private investments and funds from the Centre. A major part of state government revenue is used to pay salaries and pensions, and make interest payments. There is hardly anything available for development activities,” he says. But for the moment, at least, no one in government is thinking that far.