The AIADMK, the party currently in power in the state of Tamil Nadu, opposes FDI in Retail, wants every state government to have its own cable TV service, is against import of goods that are non-essential, and is against FDI in Retail.
1. Foreign Direct Investment in Retail Trade: The AIADMK has been incessantly opposing the policy of Foreign Direct Investment in Retail Trade. FDI in retail trade has not been permitted in Tamil Nadu. The party believes that this policy will impact small traders and “annihilate unorganised retail trade.” The AIADMK says it will take all necessary measures to rescind this policy at the All India level.
MediaNama’s Take: We disagree with this policy. Do read our submission supporting FDI in online retail.
2. State owned Cable TV: The AIADMK points out that Tamil Nadu Arasu Cable TV Corporation is providing cable services, allowing people to view more channels at a lower cost. However, the central government has not granted the corporation a license in Chennai, thereby, “people are forced to approach the private cable TV operators.” The AIADMK wants a DAS licence for the Tamil Nadu Arasu Cable TV Corporation, and says that at an all India level, State Governments will be encouraged and enabled to provide cable TV services.
MediaNama’s Take: A significantly myopic point of view from the AIADMK. A license for a state owned TV channel is hardly a topic for an important, national election. This is besides the fact that there are other ways of breaking pricing monopoly in a market, and states don’t necessarily need to be in the content distribution business, especially given that carriage of public broadcast channels in mandatory.
3. Curb on Imports: The AIADMK wants India to enforce protectionism, and move away from a policy that puts emphasis on imports, which it believes adversely impacts domestic agricultural and industrial production. It says that domestic industries should be made internationally competitive, and imports should be reduced, while exports are enhanced. What it wants: “Imports should be limited only to those essential goods of which there is a shortage in the country. If such a policy is adopted, it will reduce the Current Account Deficit and enable faster economic development of the Country.”
Our Take: This is myopic. A curb on imports from India could result in a similar stance from India’s export partners, and impact inflow of foreign investment. This will adversely impact most businesses, especially those which meet consumer demand through imports in India. While we can understand incentivising domestic production through tax concessions, restricting imports to only essential goods increases bureaucracy.
4. Against Divestment of PSU’s: The AIADMJ wants the government to not divest stake in Public Sector Enterprises, and points towards its opposition to divest the shares of Neyveli Lignite Corporation “The AIADMK will ensure that shares of Public Sector Undertakings are not divested and will work towards completely stopping the process of privatization of Public Sector Undertakings.” The proposal looks largely at retaining state ownership and speaks against profit motives that lead to labor problems.
MediaNama’s take: This approach will have serious repercussions, especially in case a government in power decides to divest the loss making MTNL and BSNL.
5. Review of Double Taxation Avoidance Agreements with Other Countries: Double Taxation Avoidance Agreements (DTAAs) are entered into between two countries to avoid taxing twice the income earned in one country and repatriated to another country. The DTAA’s are being misused to launder black money. Further, the DTAAs are also being misused to reduce tax realisation for India. Further, the loopholes in the Transfer Pricing Policy are being exploited to evade tax. Action will be taken to enhance Indian tax revenue by eliminating these loopholes and taking stringent action against those taking shelter under double taxation avoidance agreements to evade tax.