Notwithstanding the slugfest over several sensitive political issues with the Opposition, a subtle change is happening in Tamil Nadu under the DMK regime headed by Chief Minister MK Stalin. There are three unconnected happenings. All of them give a clue or two to a significant transformational shift in the thought process of the ruling political class.

First, there is this quiet move to nudge electricity users—of all kinds—to link their Aadhaar numbers with their Electricity Board consumer numbers.

Second, the DMK government has now decided to rope in, on a limited basis though, private bus operators—albeit on select routes—to run public transport in Chennai.

Third, reports suggest that the Steel Authority of India Ltd. is considering handing over non-core assets of Salem Steel Plant to the Tamil Nadu government. In return, the Tamil Nadu government is expected to facilitate the disinvestment of Salem Steel Plant.

These three are disconnected happenings. Nevertheless, these indicate a sense of readiness to readjust to the changing business environment of the modern day.

Surprisingly, there isn’t much resistance or opposition to the Aadhaar-EB consumer number linkage move. There were initial complaints about the inability to do the online linkage. But the state government has been very proactive in fixing the glitches and facilitating a smooth linkage. This has been a long overdue move. 

According to the newly-announced government decision—TNEB Aadhaar Link 2022—all customers are required to link their Electricity Board number to their Aadhaar cards. Linking the Aadhaar card is very important for all consumers to get the benefits of subsidy. In a way, this weeds out bogus power connections. It also gives a broad visibility as to the subsidy spent on the power connections. Subsidy per se is not the issue. It is the misuse of subsidy that is denting the coffers of the government.

The Tamil Nadu Finance Minister Palanivel Thiaga Rajan maintained time and again that the government should know where the money is going after all.

With power utilities under immense financial pressures, the government has to willy-nilly go for hard options. The Aadhaar linkage, at least, is intended to plug the leakages in the system. Also, fresh funding for these power utilities will be hard to come up with, if they don’t show prudence and responsibility in their operations. The financial health of Tamil Nadu Generation and Distribution Corp. Ltd. is given in the table below.

The poor financial health is a real cause for concern. Often, lack of financial creditworthiness is the most critical obstacle to implementing investment programmes. This makes power utilities even more dependent on continuous government subsidies.

Indeed, the government of India has launched a reforms-based and results-linked Revamped Distribution Sector Scheme with the objective of improving the quality and reliability of power supply to consumers through a financially sustainable and operationally-efficient distribution sector. The financial assistance under the scheme is tied to reform measures and achievement of results thereof, as per mutually agreed action plans.

The government of India have made several interventions to improve financial and operational efficiencies of discoms, including Liquidity Infusion Scheme; additional borrowing of 0.5% of GSDP to states linked to power sector reforms; introducing additional prudential norms for lending by Power Finance Corp. Ltd. and REC Ltd. based on performance of utilities.

Further, Ujwal Discom Assurance Yojana, or UDAY, was launched with an overall aim of operational and financial turnaround of state-owned distribution utilities through efficiency improvements and financial restructuring in generation, transmission and distribution sectors.

The Aadhaar linkage move must be viewed against the backdrop of the fragile financial health of TANGEDCO and also read in the context of aggressive reform nudge coming from the central government.

The decision of the Metropolitan Corp. of Chennai to draft—in a limited way, though—private bus operators into the public transportation system is widely welcomed, though it has come under flak from the unions.

This move also reflects a subtle shift in the mindset of the ruling establishment. Before the 70s, Tamil Nadu had four to five major private bus operators. The iconic TVS operated buses in the Madurai and Tirunelveli belt. Then, there were Kumbakonam-based Raman and Raman, Sakthi, ABT and Jayavilas (in Coimbatore region) and Sri Rama Vilas Service (belonging to the Amalgamation Group) in Trichy and other nearby areas.

Sometime in 1971, the bus services of big operators were taken over by the state government. Outside Chennai, some small private operators were, however, allowed to ply buses. This is the first time after a hiatus of several decades that private operators are being allowed into the Chennai public transportation system.  

Significantly enough, the MTC's move to let private bus operators in limited routes is part of the Chennai Sustainable Urban Services Programme, which involves World Bank and funding from international development institutions such as the International Bank for Reconstruction and Asian Infrastructure Investment Bank. MTC is reportedly plying 3,400 buses. The plan is to add 1,000 more under CSUSP over a period.

Last, but not the least significant, change is on the Salem Steel Plant disinvestment front. The reported move by SAIL to hand over the non-core assets of Salem Steel to the state government could be a win-win for both the state and central governments. While this could facilitate the disinvestment of Salem Steel, the state could utilise the `returned non-core’ land for other productive purposes.

 All these suggest that a new kind of pragmatism is slowly gaining currency where the focus appears to be on cleaning up the system, improving efficiency and fostering faster development. The benefits of these positive initiatives are bound to have a multiplier effect on the development of the state of Tamil Nadu.