Misgovernance, Thy Name Is Tamil Nadu

Misgovernance, Thy Name Is Tamil Nadu

by Swarajya Staff - Sunday, March 27, 2016 05:27 PM IST
Misgovernance, Thy Name Is Tamil NaduJayalalithaa
  • Piyush Goyal, the Union Minister for Power, wants to help Tamil Nadu Discom get out of its debt mess. But he can’t even get a meeting with the state Chief Minister.

That the state of Tamil Nadu is a laggard in terms of power sector reforms is a fairly well-established fact among those who track the progress of this sector closely.

CRISIL, in its recent report on the power sector reforms across the country, has categorized Tamil Nadu Discom as “High Risk” and clubbed it together with other much less industrialised states such as J&K, North-Eastern ones, Bihar and Rajasthan. 

In contrast, Maharashtra and Gujarat are in “Low Risk” category and even West Bengal is categorized as “Moderate Risk”.

One would expect that any state government in such a situation would grab with both hands the support that the Centre has to offer, and negotiate the terms and conditions (and reserve the right to walk out, if the terms are unacceptable).

No, that is not how governance works in Tamil Nadu! Listen to what the Central Minister for Power has to say about the state.

I have access to the Chief Ministers of 28 out of the 29 states…  Tamil Nadu is a state within the state…In the last 20 months, I have been able to speak to the CM of TN only once after much back-channel diplomacy... (In contrast) within 15 days of losing the election in Bihar, we were able to get the new CM to sign up (for UDAY scheme).
Piyush Goyal

The Ujwal Discom Assurance Yojana (UDAY) of the Ministry of Power, an optional scheme for states, envisages state governments to take over 75% of the debt of the DISCOM and issue long term bonds which Banks/FIs can subscribe at low-interest rates.

Such debt will not be included in the fiscal deficit calculation of the states. The long term nature of bonds, the low-interest rate and exclusion from fiscal deficit calculation can significantly improve the financial health of the Discom as well as the state.

So what explains such apathy except utter contempt for good governance?

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