Palanivel Thiaga Rajan urged the Union government to work more closely with all states, especially southern ones, to better market India’s strengths and promote cohesive economic growth across regions.
Published Oct 07, 2024 | 6:00 PM ⚊ Updated Oct 07, 2024 | 6:15 PM
Dr. Palanivel Thiaga Rajan in conversation with Phanindra Sama, Co-Ffounder of redBus at Dakshin Dialogues-2024 in Hyderabad..
Narendra Modi was a champion of federalism when he was the chief minister of Gujarat but tries to take away decision-making powers of States after becoming the prime minister, Tamil Nadu’s Minister for Information Technology and Digital Services Dr Palanivel Thiaga Rajan observed.
Speaking at South First’s Dakshin Dialogues-2024 in Hyderabad on Saturday, 5 October, he said the new trend resulted in significant disparities in resource allocation and investment opportunities among states.
For instance, states like Gujarat, Andhra Pradesh, and Bihar benefitted from preferential treatment, receiving more industrial investments and support, compared to others, Rajan said.
Noting that there were no industries or offices directly set up by the Union government, he called upon the Centre to establish such establishments in Indian states.
He pointed out that many of the investments, particularly in the technology sector, were concentrated in southern states like Tamil Nadu and Telangana, which contributed significantly to the country’s revenue and workforce.
However, the minister noted a gap in coordination, and he urged the Union government to work more closely with all states, especially southern ones, to better market India’s strengths and promote cohesive economic growth across regions.
Rajan also pointed out that the scale of doing business in India was vastly different from that of individual states like Tamil Nadu or countries like Vietnam.
While setting up operations in Tamil Nadu was relatively straightforward due to its comparable infrastructure and regulatory environment, contemplating a business venture in India as a whole presented a complex challenge, he opined.
This disparity underscored the need for a cohesive and uniform policy approach from the central government to attract investments and enhance the ease of doing business across all states.
On the need for a uniform national privacy law in India, he argued that the current patchwork of state-specific regulations complicated enforcement. He pointed out that states like Tamil Nadu, which contributed significantly to national revenue, were not receiving commensurate returns. Rajan pointed out that southern states have been generating about two-thirds of the country’s revenue yet feeling marginalized in policy decisions.
Rajan cited the example of Uttar Pradesh, with a population exceeding 200 million. It has been receiving about four times the financial allocation compared to Tamil Nadu, which has a population of around 75 million. This disparity persisted over the years, as financial transfers intended to address inequalities have not worked as planned.
From 2014 to 2024, Tamil Nadu’s per capita economic share decreased from approximately 103% to 93%, while UP’s allocation has surged, illustrating a systemic inequality where Tamil Nadu’s expected one rupee has been met with over four rupees allocated to UP.
This growing imbalance underscored the need for a cohesive approach to governance and investment policies that recognised and leveraged the strengths of all states, particularly in the booming technology sector, he said.
The minister highlighted that decisions on where to establish industries were often influenced by these disparities, making it crucial for the central government to collaborate more closely with southern states, which hold a substantial share of the nation’s technological workforce.
Moreover, he noted that regulatory frameworks must adapt to emerging fields, such as cybersecurity, expected to create millions of jobs over the next decade.
India’s complexity in governance and economic disparity illustrated the need for a thoughtful and inclusive policy framework that addressed the challenges and fostered equitable growth across all states, Rajan opined.
He further called for reforms to restore the balance of federalism, stressing that uniform policies on investments and resource sharing would lead to more equitable development across India.
Rajan highlighted the emerging industries like online gaming and virtual environments, which were gaining traction, particularly in Delhi. He noted that India, including southern states like Tamil Nadu, has not fully thought through the regulatory aspects of these sectors, especially in areas like cyber security.
As this industry grows, millions of jobs in cyber security are expected globally, creating employment opportunities over the next decade. He emphasized the need for cohesive policies to ensure India’s competitive advantage in these sectors.
Rajan also talked about increasing centralization of power under the current administration, contrasting it with global trends where power is devolved to local or regional levels.
He compared India’s constitution, which originally centralized power to unify a diverse land, with other countries like China and the US, where significant powers rest with local governments. India, he noted, remains an outlier in this approach.
Dakshin Dialogues 2024 was presented by KarPing in association with Governments of Tamil Nadu, Telangana and Karnataka along with Ichor Biologics, Start up Karnataka, ELCOT, K-Tech with IIIT-Hyderabad as knowledge partners.
(Edited by Majnu Babu).
