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1.            Introduction

1.1    Tamil Nadu has been one of the most socially and economically progressive states in the country. The inclusive development process which was ushered in by the Justice Party in the 1920s  prepared the ground for the State to achieve impressive economic growth within a strong framework of social justice.

1.2   The State has a relatively modern economy compared to most other states in the country. The past trend of growth of the non-farm sector has been one of the strengths of the Tamil Nadu economy, which has to some extent, provided alternate employment to the distressed rural folk at times of agrarian crisis. However, a number of disquieting trends have been observable in the economy over the last few years. Between 1993-94 and 2005-06, the compounded annual growth rate of Gross State Domestic Product (GSDP) of Tamil Nadu was 4.96 per cent and the per capita GSDP grew at 4.02 per cent. The corresponding GSDP growth rates during the periods of the Ninth Plan (1997-2002) and Tenth Plan (upto 2005-06) were 4.9 percent and 5.9 percent respectively.  These rates were lower than the growth rates of the all India GDP which stood at 5.5 percent and 7.0 percent for the same periods.  Further, the nature and pattern of the growth process in Tamil Nadu has been somewhat skewed, with both, spatial and sectoral imbalances.

2.       The Agricultural Crisis

2.1     The most disturbing dimension of the growth process in the last few years has been with regard to the unbalanced growth of different sectors within the economy. Agriculture as the main component of the primary sector of the economy, both at national and state level, still provides livelihood support to the majority of the population living in rural areas. As an important sector of the economy, it has a direct bearing on the overall growth, income levels and the well being of the people. The primary sector, of which agriculture is the backbone, has been in a crisis through the period 1993-94 to 2005-06. The contribution of the primary sector to the GSDP has declined from about 25% in 1993-94 to 13.3% in 2005-06. The GSDP originating in agriculture and allied activities at constant (1993-94) prices in the year 2005-06 was Rs 13,060 crore, slightly higher compared to the figure of Rs 12,873 crores in 1993-94. Throughout the period of 1993 to 2006, the value addition from agriculture and allied activities was fluctuating; the contribution of this sector was the highest in 1998-99 and the lowest, between 2002-03 and 2003-04. Although the decline was attributable to the drought conditions, which prevailed in the State during the latter period, the sector as a whole is yet to fully emerge from the crisis to attain even the value addition of Rs 23,170 crore in 2000-01. In fact, the total foodgrains production even in 2004-05 at 61.46 lakh tonnes was just about 80% of the production in 2001-02, when the State produced 76.89 lakh tonnes. 

2.2     The agricultural sector in Tamil Nadu has some special features which make the sector and the lakhs of families dependent on it extremely vulnerable to any adverse developments that impact the sector. Increasing urbanization in the State is creating a competition for resources like land, labour and water, which has impacted the agricultural sector. The net sown area showed a decline from 42.8% of the total area during the Triennium Ending (TE) 1979-80 to 37.05% in TE 2003-04. The decline was partly because of the severe drought situation in the State, but is also attributable to the increasing conversion of agricultural land for other purposes. In addition to this, the area under current and other fallows crossed 20 lakh ha during the last two decades, accounting for more than 15% of the area of the State. 

2.3     The distress among agriculturists can be better conceived in the context of the following facts : one, the average size of holding has declined from 1.25 ha in 1976-77 to less then 1 hectare now, resulting in increasing marginalisation of farmers; secondly, the high level of indebtedness of farmers and the inadequate flow of credit, particularly to small and marginal farmers, from organized financial institutions, as borne out by the survey of indebtedness in the 59^th round of NSS data. 

2.4     In general, the decline of the relative share of agriculture in the overall economy should not give cause for worry if there is a concurrent fall in the percentage of the total population dependent on agriculture. In Tamil Nadu however, nearly 56 percent of the population continues to be dependent on agriculture and allied activities and hence, the falling relative share of agriculture is a reflection of the severe challenge to the livelihoods of thousands of rural families. The crisis in agriculture is causing income deprivation among thousands of families of small and marginal farmers and landless labourers dependent on agriculture and forcing the pace of an already existing rural-urban migratory trend. Some reflection of this can be found in the large numbers of persons who have turned up to register themselves under the recently launched National Rural Employment Guarantee Programme (NREGP).

2.5   The fact that nearly 56 per cent of the State’s population which lives in rural areas is dependent on less than one-seventh of the state income raises a serious concern regarding distribution of income. Per worker productivity in the primary sector is less than a fourth of per worker productivity in the non-primary sector in Tamil Nadu and the gap is widening.  Restoring the health of the primary sector and putting it on a higher growth path is one of the top most priorities for the State.

2.6         Animal husbandry and dairying constitutes an important economic activity in Tamil Nadu. Rural employment and incomes can be boosted by the growth of this sector. Milk and meat production have fluctuated in the last five years, indirectly affecting the nutritional requirements of the population. By modernizing and extending veterinary services and other facilities,  the growth and sustainability of this sector can be assured.

2.7          Horticulture, floriculture and sericulture products have a huge demand, both in the domestic and external markets. Since these sectors have the potential to strengthen the incomes of farmers and provide indirect employment to people engaged in related activities, enhanced technical and financial support could be extended to increase the productivity of farmers in these sectors.

2.8     Tamil Nadu is one of the leading states in fish production. This sector provides employment to fisherfolk in 13 coastal districts and also in other districts where inland fisheries exist. The availability of fish offers cheap animal protein across various strata of the population and also boosts export earnings. It is necessary to augment marine and inland fish production through integrated policy initiatives.

3.          Industrial and tertiary sectors                                                                  

3.1         During the initial years of the Five Year Plans, the public investments in the industrial sector had the effect of accelerating the industrial growth process in Tamil Nadu. The industrial policies followed by successive governments in the State have created a conducive environment for the growth of large, medium and small industries in the State. During the 1990s and subsequently, Tamil Nadu also attracted foreign investments in the manufacturing sector, especially in the automobile industry.

3.2       The secondary sector has been maintaining a moderate rate of around 3.3 per cent since the 1990s. However, between 2000-01 and 2003-04, industrial performance registered a decline. Both, in the registered and unregistered manufacturing sectors the estimates of the GSDP at constant prices in 2003-04 were lower than the figures in 2000-01, although there was a slight improvement thereafter. The major household industrial activities like handloom weaving are also facing serious problems which need to be addressed. Particular emphasis should be on encouraging small, tiny and village industries. 

3.3       The construction sector and unregistered manufacturing firms have the potential  to create substantial employment opportunities. It is essential to encourage industrial growth in the state to augment state income and to increase employment opportunities in the state.

3.4       The reasonable growth that the economy has registered over the last few years is solely due to the growth in the tertiary sector. While high end services like IT might have played the major role in the growth of the tertiary sector there has also been a spurt in the unorganized and other service sectors in urban areas of the State, which have drawn labour from rural areas.   Much of the in-migration to urban areas is of rural unskilled and semi-skilled labour.

4.          Employment and Poverty

4.1     The unprecedented crisis in the agriculture sector has had important consequences on employment generation and the livelihood security of large numbers of rural households. According to NSS data, the growth rate of employment during 1993-94 to 2004 in the economy was a meager 0.2 per cent per annum compared to 1.74 per cent in the previous decade, that is, from 1983 to 1993-94. In fact, the employment of females in 2004 was even lower than in 1993-94. Stagnation in employment generation obviously has its implication for livelihood security and poverty.  The latest NSS data for the year 2004 show that poverty ratio in Tamil Nadu was 22 percent. In the urban areas of the state this ratio was 25 percent.  In absolute terms, this implies that as many as 140 lakh persons in Tamil Nadu were below the poverty line in 2004.

5 Human Development

5.1 Tamil Nadu has a long history of state intervention for human development since the 1920s. To empower the oppressed sections of society, the Justice Party, the forerunner of the Dravidian parties in Tamil Nadu, had introduced two progressive reservation orders in 1921 and 1928 for providing opportunities to all sections of society in education and employment. The mid day meal programme was first introduced in primary  schools in Madras during the Justice Party’s rule. This welfare programme was extended by the State Government in 1954 by the then Chief Minister, Thiru Kamaraj; later, in 1980, during Thiru M. G. Ramachandran’s tenure as Chief Minister, the scheme was further strengthened and expanded as the Nutritious Meal Programme. In 2006, the scheme has been fortified by Chief Minister Dr Kalaignar M. Karunanidhi with the inclusion of two eggs per week in the meals provided in the Nutritious Meal Programme centres. A host of special and reform-oriented programmes for the welfare of the scheduled castes, scheduled tribes and backward communities  and for children, women and the aged have been implemented in Tamil Nadu. The social reforms initiated in Tamil Nadu have been acknowledged  in the first National Human Development Report of the Union  Planning Commission, 2001:

“The State has, historically, been a   hot bed of social reform movements, often precipitating political action in the desired direction… The mid-day meal programme for school children, started on a large scale for the first time in Tamil Nadu has been a success.  It has improved school attendance and contributed to the nutritional level of children, besides, perhaps, helping in overcoming some social rigidity of caste and class among the children”  (pp.79-80).

As a result of these measures, Tamil Nadu, which in 1981 was ranked 7^th among Indian states in terms of human development, ascended to third position, next to Kerala and Punjab, by 1991 and this position was retained in 2001 also.

5.2          However, while the State can be justifiably proud of having attained the position of being one of the most developed States in the country, both in terms of economic achievements and human development, there remain causes for concern. The literacy rate, median years of schooling and life expectancy at birth have not increased substantially and the infant mortality rate has not decreased perceptibly in the post-2000 period. The infant mortality, one of the most sensitive indices of the health of a society, was at 41 per thousand live births in the year 2004, still far short of the Tenth Plan target of reaching an Infant Mortality Rate (IMR) of 28 per 1000 live births by 2007. About one fourth of the population is still illiterate and the school dropout rate, particularly among girls, is a major problem.   

5.3          Further, the inter-district disparity in various development indicators is still a worrying factor. The literacy rate of 73.5 % for the State as a whole encompasses a range of achievement  from about 87.55% for Kanyakumari District, to about 61% in Dharmapuri District.  Even life expectancy at birth varies from a high of 73 in Kanyakumari to a low of about 62 in Dharmapuri, Theni, Madurai and Perambalur. The inter-district disparity in per capita income is also large. As per 2002-03 figures, the per capita income in Villupuram, which is the lowest in per capita income rankings, is only 32% that of Chennai, which heads the list.

5.4     The disparities reflect the inequity that still persists within the State in terms of availability, access and utilization of the basic services and inputs that define the quality of life in a society. As the State achieves impressive attainments in the macro-indicators, the persistence of high degrees of variations between the best and the worst off sections of its population will require the commitment of the government to raise the standard of life of its poorest and most deprived people. The challenge of the Eleventh Plan, therefore, will lie in ensuring equal and equitable development across all regions and sections of the population.   

 5.5    A positive indicator of the importance of social justice and development concerns in the State is the increase in per capita expenditure on social sector over the last the fifteen years, even though the State faced major financial constraints during this period. Further improvements in the human development indicators in the State have to be brought about not only through higher state expenditure on social services for the deprived and vulnerable sections, but also through better planning and execution of service delivery. This requires not only reprioritization of public expenditure but also a re-engineering of internal processes and governance. The human capital of the State has been a major contributing factor in its progress so far; it should be ensured that adequate steps are taken to preserve and improve the  quality of this asset.

6.          Urban issues

6.1     It is a well known fact that Tamil Nadu is the most urbanized States in the country, with over 44 percent of its population living in urban areas. It is expected that by the end of the Eleventh Plan period, more than half of the State’s population would be living in urban areas. The exploding population in the urban areas of the State is a scenario that has been unfolding gradually and is fuelled both, by the crisis in the agricultural sector and by the growth in secondary and tertiary sector activities.  The problems faced by urban local bodies of the State to cope with the urban challenge is visible all around us, be it in the form of unmet demands for drinking water, the solid waste management problems, or the inadequacy of the transportation corridors to handle the burgeoning traffic.

6.2     At present, only 41 of the 152 Municipalities provide their citizens the minimum 90 lpcd of water and only 18 urban local bodies have underground sewerage schemes. It is obvious that the gap between the funds required and the available and potential resources of local bodies  is so great that it will take more than a couple of decades for the urban local bodies to be able to generate the resources required to bring civic services up to the desired level on their own steam.  During the Eleventh Plan the Government will have to support urban local bodies to find sustainable and time bound solutions to develop and maintain a high quality of infrastructure and address the issue of providing basic services, particularly  to the urban poor.

7.              State’s fiscal situation

7.1          Traditionally the management of public finances of the state has been good. The State’s own revenue as proportion to its GSDP increased from 9.84% in 1993-94 to 11.51% in 2005-06 and 12.20% in 2006-07. This is a clear indicator of Tamil Nadu’s efficiency in revenue mobilization. However, the financial transfers from the Union government to the state have been fluctuating and are on a declining trend. The total financial transfers from the Union government (Share in Central Taxes plus grants – both plan and non-plan grants - excluding loans) as proportion to the GSDP declined from 3.80 % in 1993-94 to 3.75 % in 2006-07. The proportion of the Union financial transfers to the total revenue of the State has also been declining. The adherence to the Fiscal Responsibility Act as mandated by the Twelfth Finance Commission for availing of the debt restructuring facilities, seals the state’s autonomy with regard to debt financing of public expenditure and exposes the state to fluctuations of market interest rates.

7.2          Within these constraints the State has to increase the public expenditure on many areas. The social sector expenditure needs to be increased for uplifting the poor and the marginalized. The Government has to increase expenditure to improve infrastructure facilities in the State in order to attract industrial investment and also promote the agriculture and rural sector. Pricing of infrastructure facilities still remains a problem and public-private partnerships are not a viable solution in many sectors.  

7.3          Because of the constraints on the financing of public expenditure either through taxes and transfers or through loans, the State Government’s public expenditure as a ratio to GSDP declined from 17.28 % in 1993-94 to 15.60 % in 2005-06 and increased to 16.42 % in 2006-07. In the face of declining revenue and expenditure ratios, the State has been trying to maintain a high level of expenditure on the social sector. The growth rate of per capita expenditure (in current prices) on general services has been the highest at 30 per cent per annum over 1993-2007, followed by per capita expenditure on economic services at 18 percent and per capita expenditure on social services at 16 percent. This points to the need for higher revenue mobilization to finance the increasing social sector needs of the State.

8.          Broad Objectives of the Plan 

8.1 The State’s Eleventh Five Year Plan shall be drafted keeping in view the objective of attaining a growth rate of 8.5% as envisaged by the Union Planning Commission for the country as a whole. The central objective of the Eleventh Plan shall be to safeguard the livelihood of the population and improve the living conditions in the rural and urban areas of the State. This can only be done by moving towards a regime of full employment with provision of the basic necessities to all. This would require adequate attention not just to the rate of economic growth, but also to the nature and pattern of the growth. The imbalances and disparities have to be set right, for which the innate strengths of the Tamil Nadu economy will have to be drawn upon. The government will have to play a central role in this.

9.          Strategy of the Plan

9.1     The deep crisis in agriculture which supports more than half of our population, almost total stagnation in employment generation, the continuous erosion of livelihood of large sections of population and the gaps and disparities in human development, both sectoral and spatial, all necessitate that the state plays a crucial direct role in the economy. It should also be ensured that the development strategy addresses environmental issues. The strategic direction along which the State should attempt to guide the economy over the Eleventh Plan period is outlined in this approach paper.  

9.2          Agrarian revival 

9.2.1 The revitalization of the State’s agrarian sector will be the top most priority of the Eleventh Plan. The attainment of higher agricultural growth is the key to poverty reduction in rural areas. Hence, it needs to be stated in the strongest terms that the breakthrough in agriculture will ultimately have to come, not from technology alone, but from the right vision that places the farmer and his welfare at the center of the action.

9.2.2          Though Tamil Nadu enjoys the highest position at all-India level in the productivity of many crops, the shrinking size of agricultural holdings is a major constraint in increasing production. The State should exploit its comparative advantage in the production of certain crops and should, accordingly plan its agriculture production strategy.

9.2.3 Given the overwhelming dominance of marginal and small farmer holdings in the state and the growing number of landless agricultural labourers, there is an urgent need to improve farmers’ access to cultivable lands, good farm practices, cheap inputs, adequate and timely credit and remunerative prices for their produce. The programme of distribution of two acres of cultivable land per landless labourer household is a vehicle for the economic empowerment of the most deprived sections of the agrarian economy and should be pursued with vigor. Converting fallow lands into cultivable lands for distribution is also a step in the right direction to revive the agriculture sector.

9.2.4          Access to credit from organized financial institutions is still a distant dream for many small and marginal farmers. Despite priority sector lending to the rural sector by commercial banks and the presence of cooperative agriculture credit institutions, the rural sector is burdened with high-interest credit provisioning by moneylenders. Frequent crop failures aggravate the burden of loan repayment by farmers. The recent loan and interest waiver for farmers who have obtained credit from cooperative credit banks in the State  was inevitable, given the successive crop failures in the state in the recent past. It is time that these cooperative institutions are infused with fresh capital and it is essential to democratize and professionalise the management of these institutions. These measures will help the institutions to be financially viable and operate with the objective of serving the farming communities with the financial products that suit their needs.

9.2.5 In this water-stressed State, the rational use of surface water, cautious exploitation of ground water, strengthening of natural aquifers and rain water harvesting facilities have to be integrated. Changing cropping patterns in tune with the agro-climatic conditions requires introduction of new crop varieties, particularly crops suited for dryland agriculture, appropriate water management and above all, good extension services to take knowledge and technology from laboratories to farms.

9.2.6 The required boost to agricultural production and productivity will need special focus on developing the irrigation potential of the State.  The river-basin based model for planning of water use needs to be developed into a comprehensive strategy state-wide, within a suitable administrative and regulatory framework. The Government should consider setting up a suitably empowered Water Resources Management Authority to administer this subject. Other than developing a model for river basin management in the State, the proposed Authority could also be tasked with examining the techno-economic feasibility of interlinking of the rivers within the State. Improved irrigation and crop management practices also need to be creatively and strongly promoted and farming technologies which involve lower water utilization can be appropriately incentivised . Apart from developing the efficiency of the large, river based irrigation systems, there is also a strong need to take up the restoration of the traditional water bodies in all rural areas of the State. Particular emphasis needs to be given to the restoration of the traditional systems of interlinked tanks, which had fallen into disuse in many areas due to the silting up, and encroachment of connecting channels.   

9.2.7 The new vulnerabilities and risks to which the State’s agrarian communities are exposed in the World Trade Organization (WTO) regime are not yet fully understood, much less transmitted.  Tamil Nadu should learn, from the tragic experience of many States, which have seen a large number of farmers’ suicides, that leaving the small and marginal farmers to the mercies of the market forces exposes them to risks that they cannot deal with, in the absence of any safety net. The farmers’ links with the market are rather weak, as is evident from the large difference between the farm prices and market prices of agricultural produce.  The institution of farmers’ markets and grain markets, strengthening of regulated markets and fixing of appropriate minimum support prices are essential in this context. Efforts should be made to facilitate the direct access of farmers to markets so as to minimize the role of intermediaries. Since contract farming is catching on in the State and farmers are by and large not yet capable of establishing organized bargaining, the Government should devise mechanisms to ensure that farmers are not exploited.

9.2.8          Farmers are being encouraged to produce vegetables, fruits and flowers, as the markets for these products is increasing; it is essential that infrastructure facilities be improved in rural areas to enable farmers to profitably exploit these new opportunities.  Good roads, better transport and cold storage facilities and direct links with the market will immensely benefit the farmers.

9.2.9 The development of the animal husbandry and fisheries sector is an important link in the agrarian revival strategy since this sector provides an income and livelihood buffer to the rural population. The rapid urbanization trends in the State hold a window of opportunity for the growth of the animal husbandry, poultry and fisheries sectors as domestic demand for milk, eggs etc have been generally increasing apace with growing urbanization. However, while the small milk producer is generally protected within the cooperative fold, this is not so in the case of poultry or fisheries (especially inland) where the homestead industry cannot compete with the larger, corporate players. However, homestead poultry will be effective in supplementing rural household incomes and also provide relatively low cost nutritional support in rural areas.

9.2.10          The problems of the non-farm sector will have to be squarely addressed through measures to boost such activities in rural areas. In particular, the working of institutions like the Khadi and Village Industries Board and the functioning of schemes operated by such organizations will have to be critically reviewed to bring about greater relevance and more effective implementation. 

9.2.11          Apart from creating the conditions for reviving the agricultural sector in the State, efforts will also have to continue apace towards the alleviation of rural poverty through wage and self employment programmes and through the provision of community infrastructure facilities like drinking water, sanitation, electricity, road connectivity etc. The Tenth Plan had set the target of achieving a reduction of poverty to 10% by 2006-07 and achieving near elimination by 2012.  Although the first target has not been achieved, there can be no question of pushing forward the milestones for the elimination of poverty by a further decade.  Direct employment generating schemes like the NREGP etc must be implemented in tandem with various social security measures to ensure that the manifestations of severe and chronic poverty in rural areas are  effectively addressed.

9.3          Industrial advancement

9.3.1 The fact that Tamil Nadu is one of the most industrially advanced States in the country hardly needs restating. Apart from the strong base of manufacturing industries such as leather, textiles and light and medium engineering units, the State has also emerged as a hub for the automobile and auto component industry. Tamil Nadu has also emerged as a highly preferred destination for the Information Technology (IT) industry, a phenomenon which has the potential to generate large scale employment.

 9.3.2 As far as the role of plan investments is concerned, the functional objective should be to fulfill a development perspective by creating conditions in which industry can function efficiently. The upgradation of infrastructure and simplification of procedure should be the priority thrust areas which will need to be addressed in order to give a boost to industrial investments in the State.

9.3.3 Road connectivity and the quality of the major roads in the high traffic corridors need to be given high priority. Attention also needs to be given to bring about improvements in the power sector. The energy needs of the State during the Eleventh Plan period should be properly assessed and necessary investments made with the objective of maintaining uninterrupted power supply. In particular, priority should be given to ensure conditions conducive to facilitation of industrial growth in the southern districts of the State where industrial investment has been lagging. Improvements in the connectivity in the southern districts, setting up of a southern gas grid to meet energy requirements, along with planned activities like the setting up of industrial parks with private sector participation need to be taken up. The cluster approach which is being tried in the textile sector can also be expanded for other sectors like food processing.

9.3.4 With regard to the IT sector in particular, the State has emerged as a major force in the IT and Information Technology Enabled Services (ITES) areas.  Efforts should be made to develop other cities like Madurai and Coimbatore, Tirunelveli and Salem as attractive IT industry destinations. There is now also a need for Government to take the initiative to tap the huge potential of the industry to bring rural areas into the IT network by establishing connectivity on high bandwidths that can accommodate multiple user and service interfaces. 

9.3.5 An important planning input to facilitate the growth of industry is the development of appropriate training and skill development programmes in the technical training institutions like Industrial Training Institutes (ITI) and polytechnics which will meet industry demand. In the textile, garment and construction industry, in particular, there is a large unmet demand for skilled manpower at various levels. This can translate into a large potential for generation of jobs if the training institutions are attuned to industry requirements. There is a need to create institutional mechanisms to develop greater synergy between industry and training institutions. The existing schemes for encouraging such interactions in polytechnics should be expanded further to include other training institutions like ITIs also.

9.3.6 In the case of the small scale and rural and cottage industries, there is both scope and need for more comprehensive direct intervention by Government. The decline in the number of khadi and village industries is a cause for concern since this has implications on rural employment prospects. In the handloom sector in particular, the number of idle looms calls for attention.   Similarly, the incidence of sickness in the Small Scale Industry (SSI) sector requires urgent focus. Apart from the operation of various subsidy schemes, the role of Government must be constructively expanded to provide advisory and other support to enable these industries to go in for capital up-gradation, product diversification and quality and cost controls to ensure that they remain competitive in the fast changing market.

9.4.          Urban management

9.4.1 As the State is seeking to position itself as an attractive investment destination, there is a consciousness that infrastructure in urban areas has to be built up to cope with the rising demand.  There is an urgent need for a time bound plan to develop the infrastructure and services in our cities and towns.   

9.4.2          Urban affairs management in the State has been based on the premise that apart from some measure of devolutions under the Central and State finance commission awards and a measure of part grant financing, urban local bodies must generate their own resources for investment in infrastructure. Successive State Finance Commissions have focused on the order of investments needed in urban infrastructure.

9.4.3          Funding under the ongoing Jawaharlal Nehru National Urban Renewal Mission (JNNURM) and other schemes of the Union Government may improve the situation of fund availability, but only marginally and  that too, in respect of a few cities like Chennai, Madurai and Coimbatore. There is an urgent need for a massive infusion of investment to make Tamil Nadu’s urban centres livable and measure to the world standards that we must measure ourselves by.  Part of this investment can come from tapping private capital resources and through public private partnerships. Innovative schemes like those which have been tried in Hyderabad to allow transferable development rights in exchange for land needed for widening of roads need to be tried.  A high order of investment will be needed in basic services like water and sanitation where tariffs will necessarily have to be based on relatively low paying capacity of consumers. There will be a need for strong Government intervention by way of enabling urban local bodies to access the required funds.  There is need to focus on the needs of small and medium towns, particularly those which have been registering a high rate of growth due to in-migration.

9.4.4 The poor account for almost a fourth of the urban population of the State. The needs of the urban poor need to be given high focus and attention during the Eleventh Plan.  On the employment side, much greater attention needs to be given to equipping the poor with employable skills. The existing self employment schemes for urban areas also need to be focused towards providing credit for sustainable activities – the Self Help Group (SHG) model which has proved a workable way of empowering rural poor to take up remunerative activities should be taken up seriously in urban areas also.  

9.4.5 The provision of basic services for the urban poor, including housing, water and sanitation has to be built into the macro strategies for urban development.  Urban slums must be improved, in situ wherever possible; where relocation is inevitable, adequate care must be taken to ensure proper civic services and other infrastructure. Organisations like the Tamil Nadu Slum Clearance Board should look at innovative schemes for slum improvement with the participation of the intended beneficiaries and private sector involvement, wherever possible.  

9.5.          Addressing inequities in human development

9.5.1 While Tamil Nadu has achieved significant improvements in its human development indices, it has to be acknowledged that there are many gaps and disparities to be addressed in terms of access to services and the quality of these services.

9.5.2 In the health sector, the reduction of IMRs, particularly female IMRs and maternal mortality is one of the top most priorities. The attention accorded to the upgradation of health infrastructure and services has yielded rich social dividends in the past decades. However, districts like Salem, Dharmapuri, Theni and Ramnad continue to register significantly high IMRs. Further, it has been seen that despite a reduction in the overall IMR, neonatal mortality rates have been slower in declining and account for nearly 75% of infant deaths even now. Similarly, districts like Tiruvarur, Nagapattinam, Perambalur, Cuddalore and Virudhunagar continue to have relatively high rates of maternal mortality.  The ongoing schemes to gear up emergency obstetric services need to be continued and focused especially in areas  which have been showing high mortality rates.

9.5.3 The urban health scenario poses a major challenge for the coming years. The primary health infrastructure is generally lacking in urban areas, with the result that secondary and tertiary care facilities are overstrained and outreach services, especially preventive care services are found wanting.   The IMR in urban areas has been showing an upswing in recent years and this calls for action to provide effective services in such areas.  Further, public health challenges in urban areas which will need to be tackled include the prevention of vector borne diseases like malaria, filaria, Japanese encephalitis and the newly emerging diseases like chikungunya.  Efforts should be made to create a credible system of primary health care in urban areas during the Eleventh Plan period.  

9.5.4 The persistence of malnutrition among children is largely linked to socio-economic factors. However, with the universal acclaim that the State has achieved for the mid-day meal scheme and the achievements in reducing severe malnourishment among children, it should be our objective to ensure that the nutritional status of children throughout the State is raised. The provision of  eggs in the noon meal programme will definitely have an impact in improving nutrition levels; however, there is a need for a closer study of the nutritional needs of children in districts which have been ranking among the lowest in terms of nutritional grades – including Cuddalore, Nagapattinam, Villupuram, Virudhunagar, Thiruvannamalai and Ramanathapuram. It is not a coincidence that some of these districts have a high population of scheduled castes and tribes and figure among the districts with the highest poverty ratios. The objective for the Eleventh Plan should be to make Tamil Nadu a malnutrition free state. For this, it will be necessary to provide a lifecycle nutrition security programme for those below the poverty line, with special focus on nutrition for expectant mothers, infants, children, adolescents and the aged.

9.5.5 On the education front, there are impressive showings that have been notched up in respect of enrolment in elementary education and the availability school infrastructure. However, the areas of concern which need to occupy our attention are : inter-district disparities in enrolment and drop outs at the post-primary level access to higher education and the quality of education in general. Having achieved excellent progress in closing the enrolment gap at primary level, the State has to now set its sights on the more difficult objective of maximizing secondary enrolment. This will need significant attention and investment in improving infrastructure and capacity building of teachers.  Further, the issue of disparity has to be addressed. The gross enrolment ratios at high school level, for instance, continue to show not just a spatial disparity between districts, but also highlight a gender disparity, with districts like  Villupuram, Cuddalore, Dindigul and Tiruvannamalai showing a gender gap in the enrolment ratios.

9.5.6 On the quality front, the issue of equity is of even greater significance. There is a large urban-rural, rich-poor and even a north-south divide in the quality of education offered in our schools. Attainment of basic knowledge and skills fluctuate sharply between children of relatively privileged backgrounds who attend private schools and poor children who attend public schools in the more backward regions of the State. There is a need to focus on the reasons for the chronic poor performance in some schools and to put in place interventions which enable children, particularly those who are first generation learners, to cope. Given the emerging nature of the job market and the importance of English as an essential prerequisite skill in the modern economy, there has to be a strong push to imparting fluency in English from the school level itself. It is possible to do this without affecting the primacy of Tamil, especially at the primary level, but will need considerable resources and a major capacity building exercise among teachers themselves. There has to be a proper system of evaluating the performance of schools and teachers, in which the local communities and the Parent Teacher Associations (PTAs) should be involved. 

9.5.7 At the school level, there is also a need to review whether the system of vocational education  in schools is at all relevant in the present context. It needs to be considered whether, instead of investing resources for vocational training in schools, it would not make better sense to develop the ITIs and polytechnics as the first level vocational training centres which would develop courses and curriculum suited to the needs of the present day economy. There is already an unmet demand for skilled manpower in trades like smithy, carpentry and plumbing, apart from various other jobs in sectors like the textiles and construction industry; the technical training institutions should be equipped to structure and conduct courses to enable the youth to gain access to this employment potential. 

9.5.8 In the area of higher education, there is a need to address the gender, caste and even religious disparities which exist in terms of access. The quality of teaching in the basic sciences and humanities in our institutions of higher learning has been slipping  which is both, a cause and a result of the falling demand for these courses vis-à-vis  professional courses like engineering. Corrective measures need to be taken to promote a high standard of teaching in such courses. It is imperative to focus on Research and Development (R&D) in basic and medical sciences. To strengthen R&D programmes, centres of excellence can be identified in the existing universities of Tamil Nadu in various branches of science. Humanities and linguistic centres of excellence also need equal attention. 

9.5.9 An issue that needs to be acknowledged and addressed in relation to ensuring of services like health and education in Tamil Nadu is with regard to the role of the private sector. The expanding role of the private sector in both these sectors cannot be denied and it also cannot be denied that the choice of private sector service providers may often be motivated by perceptions about the quality and accessibility of public services. Without denying the scope and space for the building of partnerships with the private sector in sectors like health and education, it needs to be stressed that the solution to inefficiencies in service delivery cannot lie in an abdication of the role of the public sector institutions altogether. Given the continuing high poverty levels in the State in rural and urban areas, the public sector model in health and education has a continuing relevance, although admittedly, a lot more has to be done to make the systems more effective and responsive.

9.5.10 The strategy to improve human development indices of the State must concentrate on reaching the groups and sections of people who are the most vulnerable and who have been relatively excluded from the benefits of the progress that has been achieved in the State.  A significant proportion of the Scheduled Caste (SC) and Scheduled Tribe (ST) population in the State are economically backward and still lack access to education, proper health care and employment. The ameliorative measures for the social and economic welfare and empowerment of such marginalized groups need to be continued with far more vigor during the coming Plan period, with a focus on providing full opportunities for education, including technical education, reducing the incidence of poverty through employment and income earning opportunities and fulfilling housing and other basic services needs. There is a need to seriously review whether the existing schemes are meeting the stated objectives. For instance, serious consideration needs to be given to integrating  for SC and ST children in general schools, instead of running separate schools for these communities, particularly since it has been found that the performance of the existing separate schools is abysmally lower than that of the ‘general’ schools. Further, since SC and ST children and also children from many BC and MBC communities often lack the resources to get admission into technical education courses, which would open the gateway to remunerative employment, there should be schemes for sponsoring their admission to Government and reputed private institutions. 

9.5.11 Tamil Nadu has been a frontrunner State in the implementation of social security schemes. Schemes like the old age and destitute widow pension schemes, assistance to poor pregnant women etc have been replicated at national level. While such schemes would be continued in the Eleventh Plan period, some attention needs to be given to reviewing the administration of these schemes so as to widen their reach and make these more meaningful.  Clubbing all social security schemes under a single administrative set up at the State level and developing a comprehensive database of the potential eligible beneficiaries under any social security scheme are steps which should be considered. Linkages between the social security scheme and training and employment programmes should also be considered, for some groups like widows. Given the greying demographic profile of the State, efforts need to be made to ensure that the social security assistance for the aged is expanded to provide full coverage of all aged persons in poor households – to  begin with, it should be ensured that at least the above 70 age group among the poor is fully covered under the scheme.   

 9.6          Augmenting finances for the Plan

9.6.1 The Eleventh Plan is addressing the issue of redistribution as its primary objective along with revival of agriculture and small industries sectors, which essentially means increasing the expenditure on social and economic services. Revenue mobilization is constrained by the harmonization of taxes without corresponding increase in powers to impose new taxes and central financial transfers to the State are also declining. Though Tamil Nadu is a growing modern economy, the tax base on which the State Government can levy tax has not been growing fast enough in sectors like manufacturing, whereas the fast growing sectors like communication, financing, and real estate offer a limited tax base. Further, debt financing is curtailed through the implementation of the Fiscal Responsibility Act.  The exercise of resource mobilization for the Eleventh Plan shall have to overcome these constraints.  

9.6.2 The Government needs to strongly pursue the case for the Union Government to allow States to levy taxes on the services sector which is the highest contributor to the GSDP. The State will also have to push for changes in the system of Union financial transfers to be processed by one statutory organization like the Finance Commission for both plan and non-plan transfers. The system of financial transfers should be changed so that the transfers are based on both equity and efficiency considerations. The changing composition of revenue and capital expenditure and plan and non-plan expenditure should be integrated in the formula for projecting future revenue requirements and for distributing the tax revenue and grants in aid among states.

10.         Tamil Nadu’s Eleventh Plan in the federal framework

10.1    The all round holistic development of any of the constituent States of the Indian Union requires a framework in which social, cultural, religious and linguistic divergences are both accommodated and supported. It is essential that the economic development paradigm adopted at the national level must accommodate and address what Amartya Sen has described as “ distinct pursuits, vastly disparate convictions, widely divergent  customs and a veritable feast of view points”. Economic development cannot be achieved in isolation; it has to be preceded by inclusion and accommodation.

10.2         It should also be recognized that the success of State planning exercises is, to a great extent, determined by the depth and vibrancy of the federal principle in Centre-State relations. The realization of State plan objectives requires a framework of constructive and cooperative federalism, both political and financial.  Currently, the process of planning in India is undergoing dynamic changes reflecting and responding to emerging regional aspirations. We cannot achieve economic development in isolation, that is, excluding the social changes. Economic development could be achieved only if public policies and programmes address the social, cultural and linguistic aspirations of the people. This necessitates Union-State cooperation in design and effective implementation of social and economic plans and programmes.

10.3 The glittering wisdom of Valluvar:

  (Resource, means, time, place and deed;

  Decide these five and then proceed)

 is the guiding principle in the preparation of this approach to the Tamil Nadu’s Eleventh Plan. We place this document before the general public for initiating discussion on the various aspects of planning so that the full participation of different sections of the society in the growth process is realized.   

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