Tamil Tribune

Why Some State Governments Demand Devolution of Power in the†Industrial Sector (Examples from Tamil Nadu (India) in 2015)

Compiled by Thanjai Nalankilli

TAMIL TRIBUNE, March 2016 (ID. 2016-03-01)
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OUTLINE

Introduction

2015-0209A: Nokia Plant Closure and Job Loss in Tamil Nadu

2015-0221A: Cotton for Tamilnadu Textile Mills

2015-1127A: Goods and Services Tax (GST) and Revenue Loss

2015-1222A: Cable TV Distribution in Tamil Nadu Cities

ABBREVIATIONS

AIADNK - All India Anna Dravida Munnetra Kazhagam

DAS - Digital Addressable System

GST - Goods and Services Tax

SIMA - Southern India Millsí Association


Introduction

The list provided here is only a sample of events from 2015 illustrating the need for devoluting more power to states in the industrial sector. States further away from the Hindi states, such as the eastern and southern states, are particularly affected because the Hindi politicians who dominate the Indian central government do not know much about the culture or socio-economic realities of these states.

2015-0209A: Nokia Plant Closure and Job Loss in Tamil Nadu

Indian Government income tax department freezing Nokia assets results in 30000 job loss in Tamil Nadu. Tamil Nadu State also had tax claim; it reduced the tax from 2400 crore Rupees to 912 crore Rupees in order to protect jobs. Tamil Nadu State Government asked Indian government to unfreeze the assets and India did not. (Business Standard; February 9, 2015) Unfreezing the assets would pave way for other companies to acquire the factory and operate it thus eliminating or reducing job loss. Eventually some other company may open the factory and at least some of the jobs may be recovered but in the meantime it is unwanted hardship on 30000 Tamilnadu workers. This is one reason we want financial and industrial devolution. State government is from the local soil and is sensitive to the ground situation and needs of local workers. The Indian government from hundreds of kilometers away is neither sensitive nor really care about job loss in a far away state.

2015-0221A: Cotton for Tamilnadu Textile Mills

Tamil Nadu does not produce enough cotton for the textile mills in the state. So the mills have to buy and bring cotton from other states. Cost of shipping a bale of cotton from Gujarat to Tamil Nadu mills using Indian ships is Rs. 672 but it is only Rs. 433 from West Africa to Tamil Nadu using foreign ships. This excessive cost is due to restrictions and duties imposed by the Indian government. Southern India Millsí Association (SIMA) asked the Indian government rectify the situation (The Hindu Newspaper; February 21, 2015). Indian government has not rectified the situation as of the time of this writing. In due course the situation may be rectified but in the meantime not only textile mill owners but also textile workers suffer. This is one reason we request devolution of power on industry matters to state governments.

2015-1127A: Goods and Services Tax (GST) and Revenue Loss

AIADMK Member of Parliament K. Gopal said that Goods and Services Tax (GST) Bill would cause revenue loss to TN and AIADMK would not support it. He added that GST is likely to cause huge losses to manufacturing and net exporting states like Tamil Nadu. Tamil Nadu Chief Minister J Jayalalithaa has already expressed concern about the impact of GST on fiscal autonomy of states. (NDTV Website; November 27, 2015) (AIADMK - All India Anna Dravida Munnetra Kazhagam; a major political party in Tamil Nadu)

2015-1222A: Cable TV Distribution in Tamil Nadu Cities

Tamil Nadu State Government-owned Arasu Cable TV Corporation (TATCV) has been transmitting TV signals in TN for many years. It applied for digital distribution (DAS - Digital Addressable System; this is a newer, better technology). in 2012 and Government of India (GOI) is procrastinating even though it gave permission to 326 private companies during that time. GOI ordered that TATCV cannot distribute signals in cities like Chennai unless it is DAS. Since GOI has not granted TATCV permission, signals will be cut off on December 31, 2015 per GOI order. So TATCV petitioned HC and HC ordered that it may transmit signals until it makes a decision. (The New Indian express; December 22, 2015), (Thinathanthi; December 22, 2015). If Tamil Nadu Government owned cable TV distribution were to end in Chennai and other cities, private companies may raise the price of cable TV subscription.


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