Tamil Tribune

Tamil Nadu-India Economy and Finances

Is Tamil Nadu Economically Discriminated In India?

Thanjai Nalankilli

TAMIL TRIBUNE, July 2011 (ID. 2011-07-01)
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1. Introduction

2. Chidambaram Speaks Up

3. Are We Better Off as Part of India?

4. A Story


AIADMK - All India Anna Dravida Munnetra Kazhagam

BJP - Bharathiya Janata Party

DK - Dravidar Kazhagam

DMK - Dravida Munnetra Kazhagam

GDP - Gross Domestic Product

1. Introduction

Even before the British left India in 1947 and the Hindi-dominated Indian parliament took control of India, some Tamil politicians realized that Tamil Nadu and the other southern states would be economically discriminated. So they called for a separate country for the southern states called Dravida Nadu. But for a few speeches here and there these politicians did very little more. Dravida Nadu did not happen. Tamil Nadu became part of India. (NOTE: Hindi Members of Parliament (MP) constitute only about 30 to 40% in parliament. But together with members from nearby regions and willing politicians from south and east, they have more than a majority in parliament and no law can be enacted without their cooperation.)

During the 1950s and 1960s, the Tamilnadu political party Dravida Munnetra Kazhagam (DMK) continued to say that Tamil Nadu and the other southern states were economically discriminated. Nothing happened, and nothing can happen because Hindi politicians (from north) control the parliament.

From the 1970s, DMK and its offshoot AIADMK (All India Anna Dravida Munnetra Kazhagam) started making electoral alliances with north-centered all-India parties like the Congress Party and the Bharatiya Janata Party (BJP), and muted their criticism of North exploiting the South. Also, DMK and AIADMK formed state governments in Tamilnadu successively and feared antagonizing Hindi parliamentarians who could easily dismiss the state government through parliament; in fact they did so thrice (as of this writing). In any case, popular Tamil Nadu politicians quieted down about the economic discrimination of Tamil Nadu. So most people in Tamil Nadu did not realize the extent of money taken out of Tamil Nadu to subsidize Hindi states [Reference 1].

Just because Tamilnadu politicians quieted down about the economic discrimination and just because people do not realize the extent of the discrimination, it does not mean that Tamil Nadu and some other non-Hindi states are not subsidizing Hindi states ever since 1947.

How does this outflow of money from Tamilnadu to Hindi states affect the people of Tamilnadu? Standard of living has not significantly improved over the years in Tamil Nadu. Had there been no outflow of funds from Tamil Nadu to Hindi states year after year for the past several decades, standard of living in Tamilnadu would have been much higher today. Every segment of society in Tamil Nadu would be enjoying this benefit.

2. Chidambaram Speaks Up

"India's growth would have progressed better if it comprised its southern and western parts only", so said Mr. Palaniappan Chidambaram. He further added that India could achieve 11to12 percent growth if it were the South and West only, and noted that the rest of the country held the South and West back. Who is this Chidamparam? At the time he said these things, in 2009, he was the Home Minister of India. Before this he held the position of Finance Minister of India from 2004 to 2008. He knows the financial situation, flow of monies between states and allocation of Indian government funds to different states. In other words, he knows what he was talking about.

Mr. P. Chidamparam made these statements in private to American Ambassador Timothy Roemer. He did not expect that this private conversation would become public. But it did become public. How? Ambassador Roemer sent this information to the American government in a confidential cable in August 2009. About a year later a disgruntled American government employee leaked this and thousands of other confidential diplomatic cables and the cables were put on the Internet by an organization called WikiLeaks. The Hindu newspaper published Ambassador Roemer's cable in March 2011.

Read Mr. Chidambaram's statements again:

"India's growth would have progressed better if it comprised its southern and western parts only". 

"India could achieve 11to12 percent growth if it were the South and West only".

"The rest of the country held the South and West back".

This was exactly what DMK leaders like former Tamil Nadu State Chief Minister C. N. Annadurai were saying in the 1950s and 1960s. This is exactly what I have been writing for over a decade now: Tamil Nadu and some other non-Hindi states are subsidizing Hindi states and because of this the standard of living has not improved significantly in Tamil Nadu. The sweat and labour of Tamil people are subsidizing Hindi states. We are unable to enjoy the fruits of our own labor fully.

3. Are We Better Off as Part of India?

There are those who say that foreign companies are building factories in Tamilnadu, Tamil Nadu has a growing information technology industry (IT industry), we are thus well off as part of India. Yes, foreign companies are setting up factories in Tamil Nadu. Yes, Tamil Nadu has become a player in the information technology industry. These are happening not because Tamil Nadu is part of India; these are happening in spite of Tamil Nadu being part of India. Tamil Nadu (and the rest of the South and West) would have been growing much faster and economically better off if they were not part of India. This is the crux of former finance minister Chidambaram's assessment. 

There are those who argue that the better-off states like Tamil Nadu should subsidize Hindi states. How long do we have to subsidize? As of this writing, in June 2011, we have been subsidizing Hindi states for over 60 years, year after year, every year. That is too much. Tamil Nadu is by no means rich compared to many other nations in the world. We want to enjoy the fruits of our hard work, sweat and labour. We cannot and should not send our hard earned money to Hindi states year after year for over half a century and still continuing. They have to help themselves instead of sitting as our overlords and demand that part of our hard earned monies go to subsidize them.

Let me illustrate the situation by a simple example.

4. A Story

Two brothers live together in a house with their wives and children. The older brother is lazy, cannot hold a job for long, moves from job to job with periods of unemployment and earns much less than the younger brother. The younger brother studied hard when he was in school, got a job, worked hard and earns somewhat more than his brother. The older brother controls the combined finances of the household. Younger brother is subsidizing the living expenses of the older one. Because of this he is not getting the full benefit of his hard work at school and now in workplace. He and his wife and children could have a better life but for the drain of his money to provide for his brother's family. Instead of using this opportunity to get some vocational training, get a better job and work hard there, the older brother is continuing to live in his easy-go lifestyle. This is going on year after year for many years.

It is time for the younger brother to leave the combined households and start his own separate household with wife and children where he and his own family could have a little more money to spend without his brother's family taking parts of his income year after year, whether the younger brother consents to it or not. The younger brother could occasionally send some money to help out his older brother, when he so chooses, but not by compulsion. This is like richer countries giving foreign aid to less developed countries on their own volition.

[POSTSCRIPT: Many issues relating to economic discrimination of Tamil Nadu in India such as the impact of globalization, smaller country versus larger country, etc. are discussed in other articles available on the Internet. Either go to Reference 1 or search the Internet for Thanjai Nalankilli, economic discrimination Tamil Nadu India.]

Editor's Note: Chidambaram is also spelled as Chidamparam, Chidambharam, Chithambaram and Chithamparam; Nalankilli is also spelled as Nalangkilli.


1. Archived articles on Economic Discrimination of Tamil Nadu (OR Search the internet with the following key words: Nalankilli "economic discrimination" Tamil Nadu India )

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