New Delhi: The Tamil Nadu government seems to be doing a rethink on major policy decisions after a change of political guard in the state.

For instance, its support to Ujwal Discom Assurance Yojana (UDAY) or discom debt restructuring and backing goods and services tax (GST), policy moves it had consistently opposed when J. Jayalalithaa was the chief minister.

In the ninth GST council meeting in New Delhi on Monday, Tamil Nadu was seen playing a proactive role that ultimately helped break the deadlock on the contentious issue of sharing administrative powers. This has paved the way for a rollout of the GST—which aims to unify India economically for the first time—on 1 July.

It was Tamil Nadu’s initial proposal tabled by its representative K. Pandiarajan, minister for education, sports and archaeology, that was debated upon and modified to finally arrive at a consensus.

The issue of sharing administrative powers has been a major bone of contention between the Centre and the states with both sides looking to get a major chunk of the assessees.

Previously, Tamil Nadu was one of the biggest opponents of GST arguing that it will erode the state’s autonomy by taking away the right to formulate tax policies. Tamil Nadu, a manufacturing state, with Jayalalithaa at the helm, also feared revenue losses with a transition to GST—a destination-based tax that will be levied by the consuming state rather than the producing state.

In fact, its members of Parliament even walked out when the Constitution amendment bill was being voted in the upper house of Parliament.

In the GST council meetings also, Tamil Nadu had been vociferous in its objections on certain issues like the Constitution provision of providing one vote to one state, irrespective of its size. It was also firm on its stand of full compensation for five years for revenue losses arising from a transition to GST.

But with Jayalalithaa’s death on 5 December, and O. Paneerselvam taking over the reins of the government, the state administration seems to be having a rethink on many policy initiatives of the Central government.

Another example is Tamil Nadu joining the Central government’s power utility turnaround scheme UDAY last week after months of reluctance, becoming the 21st state to bail out state-owned distribution firms struggling with mountains of debt.

Tamil Nadu’s signing up for UDAY comes after some of the utilities showed signs of turnaround with the help of steps meant to cut power theft and improve efficiency.

Jayalalithaa had firmly opposed the UDAY scheme though some progress was made when Union minister of state for power Piyush Goyal met her at the secretariat on 15 July. Goyal had then stressed that the state will save at least Rs22,400 crore of discoms’ debt in the next three years.

According to data from the Central government, the Tamil Nadu Generation and Distribution Corp. has an outstanding debt of about Rs75,700 crore as on September 2015. Out of this, 75% of the debt belonging to distribution business alone will be taken over by the state as the turnaround scheme does not cover power generation business.

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