Why Tamil Nadu Could Not Do Business The Way its Peers Did Under DMK Supremo Karunanidhi
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With the demise of Muthuvel Karunanidhi, the Indian politician who served as the Chief Minister of Tamil Nadu for five terms and led the Dravidian movement as the President of his political party Dravida Munnetra Kazhagam, South Indian lost one of its most active politicians. Having entered politics at the age of 14, Karunanidhi’s party was the only one to oppose the 70s Emergency in India.
Today as many mourn the loss of Karunanidhi on his death at the ripe old age of 94, we discuss the policies related to business of a person who ruled Tamil Nadu for twenty years. Could he have done better for his state? Let’s have a look at some key factors.
The South Indian Business Topography
Today when we look at the South Indian panorama with places like Hyderabad and Bengaluru becoming popular destinations amongst aspiring entrepreneurs and professionals, we don’t see Chennai anywhere close to these places. If we look at the scale of investment done by private players, we will be able to understand that it’s because of the initiative taken by the respective leaders of these states. But Karunanidhi had not been able to show that kind of commitment to the development of commerce or industry.
Noted historian Rayvi Kumar Pillai says Karunanidhi’s stance on the caste division resulted in business units being pushed to secondary character instead of using prime force for social revolution.
“For his political profit, he spread discontent among Hindus against the so-called Upper Classes. Hence, the educated and learned classes left for greener pastures in Karnataka, Maharashtra and Delhi where they prospered due to their learning and Tamil Nadu remained backward for business except trading,” says Pillai.
Historical Advantage Lost
The irony is that Chennai what was known as Madras was the capital of the South Indian province of the same name and the other states of Karnataka, Andhra Pradesh and Kerala were a part of the Madras province and did not even exist separately.
Madras was one of the finest cities in india even before independence and even then it has not been able to become what Bengaluru is today because of policy paralysis of the regime that ruled Tamil Nadu for years.
Pillai believes Karunanidhi systematically destroyed the intellectual class, which was epitome of Tamil culture for centuries and replaced it with the Dravidian fallacy - the brainchild of his mentor Periyar - that prescribes the agenda of a separate Dravida identity.
Tamil Nadu was amongst the first India states to privatise engineering colleges. The state with its huge talent pool and an annual turnout of close to two lakh engineering graduates and almost an equal number of trained polytechnic students had a great chance to become the hub of aspiring entrepreneurs. The ruling parties, however, were not able to provide the kind of infrastructure required for business and students were seen thronging to nearby states, namely Andhra Pradesh and Karnataka, to fulfill their dreams.
"Karunanidhi not only destroyed the spirit of entrepreneurship in the upcoming youth but also pushed the once culturally and economically prosperous region towards a retreat. Since hundreds and thousands of years, this part of India was a centre of trade, especially of spices. Pepper still dictates the economy of Tamil Nadu and neighboring Kerala. But Karunanidhi could not channelize the state’s strength to its advantage,” says Manoshi Sinha, Editor of Business Sphere Print Magazine.
Wrong Policies with Respect to Investment
Dravidian politics was not exactly a boon for the economy of the state as it compelled many North Indian businessmen to be averse from the region. People were afraid to set up businesses in Tamil Nadu and many prominent people even left Tamil Nadu in order to escape trouble and to start their business elsewhere in the 50s and 60s.
Only very strong business houses were able to resist politics. One important example is that of Dalmia Cement, which was set by Jaidayal Dalmia in Kallagudi in Tamil Nadu in 1953.
Karunanidhi with the help of Murasoli the official newspaper of DMK attempted to get ride of the Dalmias. They called it a North Indian aggression.
Dr Thanjai Nalankilli in his book said, “Political history of the rise and fall of Dravidian parties in Tamil Nadu”, writes about this agitation because of which Karunanidhi was able to establish himself as a politician. But it fared badly for investments that could have been queued up for the state.
After this incident, businesses were afraid to go to Tamil Nadu and many other small ventures wrapped up their belongings and fled. This created a perception amongst business houses that Tamil Nadu not a safe place to do business. The advantage fell in the hands of Karnataka, specifically Bengaluru and Andhra Pradesh. Both Bengaluru and Hyderabad are today considered appealing for startups as opposed to Tamil Nadu.
(Updated with comments)