TN political drama may worsen stasis in India's

 2nd biggest eco Political uncertainty in Tamil Nadu started months ago when the late chief minister Jayalalithaa was hospitalised, and peaked when she died, leaving Sasikala and perennial acting CM O Panneerselvam to scrap over the succession. Economy Editor, The Supreme Court decision to send Sasikala to jail for four years prolongs a drama that threatens to slow decision-making in the country’s second-largest state economy. The best outcome now for the state’s growth would be a quick resolution that installs a stable government; the worst outcome would be a split in the AIADMK between supporters of O Panneerselvam and Sasikala, and further wrangling. Political uncertainty in Tamil Nadu started months ago when the late chief minister Jayalalithaa was hospitalised, and peaked when she died, leaving Sasikala and perennial acting CM O Panneerselvam to scrap over the succession. The bureaucracy in the state has been focused primarily on running the day-to-day administration of a state that is home to several foreign investors, notably the car companies Hyundai and Ford. Sasikala has also moved to replace some of Jaya’s top officials, exacerbating the unsettled situation. Jayalalithaa herself spent time in jail over a corruption case in 2014, leaving Panneerselvam to mind the state, when a period of drift seems to have started. Her own populist measures built a votebank for her but hurt the state finances.

 Though it has an economy of USD 150 billion, Tamil Nadu was ranked 18 among 30 states and five union territories, in the Centre and the World Bank’s latest report of States’ Ease of Doing Business. With a score of 62.80 the southern state figured behind Bihar and Himachal Pradesh, amid fears that political uncertainty could delay even procedural decisions and make it a less-preferred investment destination. Tamil Nadu's economy measured by the “real” or inflation-adjusted gross state domestic product (GDP) grew at an average of 6.6 percent, lagging the national average of more than 7 percent. The state's budget for 2016-17 accounts for a revenue deficit of over Rs 9,000 crore, nearly double what it was for the previous fiscal year. Tamil Nadu's fiscal deficit to GDP ratio has been steadily rising, from 2.2 per cent of the GDP in 2012-2013 to 2.9 percent of the GDP in 2015-2016, though this number is within the 3 per cent fiscal deficit limit prescribed by the Finance Commission.

 In terms of size of the economy, Tamil Nadu remains the second largest among all states, behind Maharashtra. The state accounts for about 15.8 percent share in domestic production and 14.9 percent share in domestic automobile sales. Companies such as Eicher Motors (Royal Enfield motorcycles), Ashok Leyland (heavy vehicles), Nissan, Hyundai and Renault (cars) and TVS Motor (two wheelers) have plants and large corporate operations in the state. In November, US car maker Ford Motors had announced an investment of USD 195 million in a technology and business centre in Chennai over a five-year period, to develop new products, design mobility solutions and provide business services

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