Not ‘How Many’ But ‘How Well’ Are Projects Executed: The Debate Over Fund Allocations To Tamil Nadu Should Be Approached Differently

Over the past few days, there has been a renewed debate over the funds given to Tamil Nadu in the rail budget.

Writing on X, Chief Minister M K Stalin said that his government was deeply concerned about the reduction in allocation of funds for Southern Railways.

He stated that while funds for new lines were reduced by Rs 674.8 crore, those for doubling projects were reduced by Rs 285.64 crore as compared to the amounts announced in the interim budget.

Others asked why the allocation for certain projects such as a new line between Erode and Palani was a token Rs 1,000. 

The key bone of contention has however been the lack of central funding for the second phase of the Chennai Metro, which has an estimated cost of over Rs 63,000 crore. 

The Dravida Munnetra Kazhagam's (DMK) charge is that the Centre is not sensitive to Tamil Nadu’s needs.

Responding to Chief Minister Stalin's post and the DMK's charge, Railway Minister Ashwini Vaishnaw and Bharatiya Janata Party (BJP) state president K Annamalai wrote that one of the key obstacles for implementation of railway projects in the state is problems in land acquisition. 

They stated that of the 2,749 hectares of land required for various projects, only 807 hectares had been acquired.

Annamalai also mentioned how in certain areas, allocation had actually increased. On the issue of doubling works, he said that the allocations for Tamil Nadu specific projects (as Southern Railway contains divisions that do not come under the state), have actually seen an increase of Rs 259 crore as compared to the interim budget. 

Giving a specific example of bottlenecks in land acquisition, he asked if the acquisition for the Tiruvannamalai-Tindivanam line, which had been going on since 2010, had been completed.

Both of them wrote that the state is getting a lot more under the Bharatiya Janata Party government when compared to the allocations during the Congress-led United Progressive Alliance (UPA) government, of which the DMK was an important part.

But what must be noted is that this kind of back and forth is not new and is likely to go on. 

Vaishnaw had spoken about challenges with regards to land acquisition in Kerala and Tamil Nadu soon after the budget. Last year, Transport Minister Nitin Gadkari said in Parliament that the DMK government's inability to provide land, clearances and construction materials like earth and aggregates on time had delayed highway projects in the state.

What therefore needs to happen is a change in the nature of debate as the current situation isn’t helpful to anyone, least of all, the people of Tamil Nadu.

While for argument's sake, it can be said that all rail projects should be given equal priority, it is not possible due to what anyone who has studied basic economics would know, ie, while needs are limitless, resources are scarce.

How then should this conundrum be resolved?

The answer to that is to peg the funding (or at least a part of it) to performance.

That would address the kind of questions put forth by Annamalai, which were the state government’s expectation of generous allocations of funds from the Centre, while not being able to acquire land and execute projects on time.

Would it not be more prudent for the Centre to allocate funds to projects that are on track to be completed or in states which are implementing them as per the targeted timelines?

It is important to keep in mind that the amounts involved in infrastructure funds run into thousands of crores.

Also, it is not as if ‘conditions’ have not been imposed in order to nudge states to perform better. Many of the grants given to panchayats are tied to performance, and states have been allowed higher borrowing limits if they undertake reforms in the power sector. 

That way those performing well get rewarded and others are forced to pull up their socks.

None of this is to suggest that what is happening in the case of the funding for the second phase of the Chennai Metro is right. It is indeed important that the central government takes a quick decision over the quantum of funding it could provide. 

But those taking only the state’s side of the argument should understand that the Centre is not against the state and Vaishnaw’s post says the same — if Tamil Nadu takes one step, his government would take two steps for the development of railways in the state.