AIADMK’s poll promises put Tamil Nadu’s welfare politics, fiscal health in spotlight

AIADMK general secretary Edappadi K Palaniswami has unveiled the party’s first set of election promises ahead of the Tamil Nadu Assembly elections, on the occasion of party founder MG Ramachandran’s 109th birth anniversary.

The pledges, which include enhanced financial aid for women, free bus travel for men, and expanded housing schemes, bear striking similarities to ongoing initiatives by the ruling DMK government, drawing sharp criticism from opponents who accuse the AIADMK of “copy-pasting” policies.

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This comes at a time when Tamil Nadu has a robust but debt-burdened economy. While the state has India’s second-largest GDP, fiscal pressure from welfare schemes continues to rise.

AIADMK rolls out freebies

Addressing reporters in Chennai, Palaniswami outlined five key promises aimed at wooing voters ahead of the 2026 Assembly elections. The centrepiece is the Kula Vilakku (lamp of the family) scheme, which promises a monthly stipend of Rs 2,000 to all family ration card holders, deposited directly into the bank account of the woman head of the household. This mirrors the DMK's existing “Kalaignar Magalir Urimai Thogai” scheme, which provides Rs 1,000 monthly to eligible women.

Among other announcements are extending free bus travel in urban areas to men, continuing the scheme for women; the “Amma Illam” housing scheme to provide free concrete homes in rural areas and apartments in urban zones, with special provisions for Scheduled Caste families; enhancing workdays from 100 to 150 under rural employment scheme, and facilitating a subsidy of Rs 25,000 to five lakh women for purchase of two-wheelers under the “Amma Two-Wheeler” scheme.

Growth amid fiscal strain

Tamil Nadu contributes over 8.5 per cent to India’s GDP, driven by strong industries such as automobiles, textiles and information technology. The state hosts major auto companies like Hyundai and Ford, Tirupur is a major hub for knitwear exports, and Chennai’s IT corridor continues to attract investment and jobs.

However, this strong economic base is weighed down by rising debt. The state’s debt has increased from about Rs 5.18 lakh crore at the end of the AIADMK’s last term in 2021 to an estimated Rs 8.5 lakh crore by 2026, according to recent budget figures. Economists say the rise is due to high welfare spending, costs linked to post-COVID recovery and lower revenue growth after the rollout of GST. As a result, Tamil Nadu’s debt-to-GDP ratio is estimated at 25–28 per cent, higher than the national average.

While the state boasts high human development indicators, with literacy at 85% and per capita income about 50% above the national average (around Rs 2.8 lakh), challenges persist. Rising prices of essential goods, stagnant rural wages and climate-related stress on agriculture, which contributes around 12% to the GSDP, continue to strain household budgets. The government’s reliance on borrowing nearly Rs 1 lakh crore annually to fund schemes such as free electricity for farmers and distribution of laptops to students has drawn scrutiny from rating agencies, which have warned of potential downgrades if fiscal reforms lag.

War of welfare claims

State Industries Minister TRB Raja lambasted the AIADMK’s manifesto as a “pathetic duplication” of the ruling party’s achievements over the past five years. “The AIADMK has sunk to such lows that it is rehashing our schemes just to stay relevant,” Raja said in a statement. He added that Palaniswami had dismissed similar DMK promises in 2021 as financially unviable, only to adopt them now.

Raja also mocked the AIADMK’s pledge to extend rural employment, pointing to the party’s alliance with the BJP, which has pushed labour reforms criticised for weakening employment guarantees. “Palaniswami backed the BJP’s laws that dug the grave for the 100-day scheme, yet now promises 150 days. He may fool himself, but not the people of Tamil Nadu,” he said.

However, defending the promises, Palaniswami emphasised prudent fiscal management during his tenure. “Under AIADMK, Tamil Nadu's debt was only Rs 5.18 lakh crore despite spending Rs 40,000 crore on COVID relief with no tax revenues. The DMK, however, has ballooned the debt within one term, reflecting sheer administrative inefficiency,” he said.

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AIADMK Rajya Sabha MP IS Inbadurai supported the argument, saying the party would not discontinue popular schemes for political reasons and could expand welfare by improving revenue management. He added that Palaniswami had managed state finances prudently even during the pandemic.

Populism meets fiscal reality

Senior journalist Priyan noted that an AIADMK victory could result in the renaming of DMK-initiated schemes, a practice seen in previous regime changes. “Palaniswami must clarify his fiscal strategy. As a BJP ally, the AIADMK may seek to leverage central funds for additional support. But politicians excel at making promises, and the DMK could counter with a monthly aid of Rs 2,500,” he opined. He noted the irony of both Dravidian majors competing in freebies ahead of Prime Minister Narendra Modi’s visit next week, at a time when such populist measures are unlikely to find endorsement from the Centre, which has cautioned states on debt sustainability.

As the election heat intensifies, analysts see an escalation of welfare pledges by both the DMK and the AIADMK, with voters weighing promises against the state's fiscal health. Whether these announcements translate to votes remains to be seen, but they underscore Tamil Nadu's enduring political tradition of blending populism with economic ambition.