An outsider inside: Is this beginning of the end or a new start for 'PTR'?

When CM M K Stalin reshuffled the Cabinet last week, moving Palanivel Thiaga Rajan to the relatively less-important portfolio of information technology (IT), many eyebrows went up

Palanivel Thiaga Rajan (pictured) was largely considered one of the best finance ministers in Tamil Nadu’s recent history. It wasn’t simply his credentials (engineering and business degrees from prestigious universities in India and the US, including the Sloan School of Business at the Massachusetts Institute of Technology in 2001) that drew attention to him, but also his practical experience.

PTR (as he is colloquially known) had attempted to turn around the state’s finances in the two years since the Dravida Munnetra Kazhagam (DMK) government took office in 2021.

He has a background in investment banking at Lehman Brothers and as senior managing director of global foreign exchange and money markets at Singapore’s Standard Chartered Bank. This gave PTR a ‘rockstar’ image at the time.

He was even-handed in his appreciation of financial management, refusing to fall into the trap of political posturing as he praised Union Finance Minister Nirmala Sitharaman for her ability to ‘listen’.

When Chief Minister (CM) M K Stalin reshuffled the Cabinet last week, moving PTR to the relatively less-important portfolio of information technology (IT), many eyebrows went up.

According to political pundits, the immediate reason may be the two audio clips released by Tamil Nadu Bharatiya Janata Party (BJP) chief K Annamalai on April 19 and April 25, now known as the ‘PTR Tapes’, in which PTR is heard ‘making allegations about Stalin’s family’.

In the first audio released on April 19, PTR is allegedly heard saying Stalin’s son Udhayanidhi and son-in-law V Sabareesan illegally made about Rs 30,000 crore last year. This was followed by another audio on April 25, in which he is heard praising the BJP for its ‘one man, one post’ strategy. Immediately after this, PTR came out in public, calling the recordings ‘fabricated’. 

“Now, it is very clear that PTR was transferred to the IT department only because of the audio tapes. The minister has not reacted legally, and he is hesitating about filing a complaint. It shows the audio is real. If Stalin feels PTR was incompetent in running the finance ministry, he should apologise to the people. As long as that does not happen, people will conclude this transfer is because the CM is afraid of removing PTR, and he may expect more such revelations,” Tamil Nadu BJP Vice-President Narayanan Thirupathy told Business Standard.

However, the audio clips may not be the only reason for the ouster of PTR from the finance minister’s post. Sources indicate that several ministers were unhappy with the finance department as it was sitting on files, delaying project implementation for a long time.

According to one media report, there were as many as 1,000 files stuck for PTR’s clearance at one point, and Stalin himself had to intervene to speed up clearances.

“He is a rockstar as finance minister. As far as policies are concerned, no one can match the performance of PTR in Tamil Nadu in the recent past. At the same time, he should realise the ground realities of politics. Whether the audio tapes are real or fabricated, some senior leaders were reportedly putting pressure on the CM,” said R. Venkatesh, a political analyst and faculty member at the University of Madras.

“There was also a problem regarding the allocation of funds. Other departments were facing difficulty getting funds cleared by the finance minister. He always insisted on the rulebook. He tried to bring in fiscal discipline,” added Venkatesh.

Another factor that may have cost PTR his job could be the infighting in the DMK’s Madurai district unit. He and another minister from the region were reportedly in a cold war, which led to the PTR faction fielding its candidate for the Madurai urban district secretary post, which the rival faction won. Some believed this cold war might have also proved costly for him.

During his term, he was instrumental in bringing the state’s annual revenue deficit down to Rs 30,000 crore last fiscal year, from Rs 62,000 crore during the time of the All India Anna Dravida Munnetra Kazhagam government.

Tamil Nadu’s debt-to-gross domestic product ratio also came down from 32 per cent in 2021 to 25.63 per cent last fiscal year.

PTR’s successor, Thangam Thennarasu, is considered equally efficient. During his tenure at the industries ministry in the past two years, he was successful in attracting investments of around Rs 2.73 trillion by signing 224 memoranda of understanding — one of the largest in such a short span in the state’s history.
 

Thennarasu was replaced at the industries ministry by T R B Rajaa, who was in charge of the party’s non-resident Indian and IT wings and is the son of DMK veteran and former Union minister T R Baalu.

Interestingly, Stalin dropped dairy development minister S M Nasar from the portfolio, following reports of inefficiency and charges regarding misappropriation of funds in Tamilnadu Co-Operative Milk Producers’ Federation (Aavin).

However, Thennarasu has a job on his hands as the state’s outstanding debt is expected to touch Rs 7.26 trillion in 2023-24, about 25.63 per cent of gross state domestic product. He has to stabilise this, as well as continue welfare spending.