Business
‘TN govt may get into reform mode after local body polls’
The DMK-led Tamil Nadu government may get into reform mode post the local body elections likely to be held by the end of 2021, say party leaders and industry experts.
“Though a white paper on the Tamil Nadu government finances spoke about the necessity to hike tax rates and other things for those who can bear it, the state budget that was presented was a usual one. Perhaps the state government may get into reform mode after the local body elections,” K.C. Palanisamy, former AIADMK MP and MLA, told IANS.
Palanisamy said the local body elections may be held before the end of 2021 or February 2022.
Finance Minister Palanivel Thiaga Rajan after declaring ‘once in a generation reforms a must’ and ‘business as usual’ approach cannot continue while presenting the white paper on the state government’s finances, came out with a relatively populist budget.
As per the white paper, reforms/restructuring in state government undertakings, statutory boards, power utilities, mobilisation of tax revenues, mode of subsidy deliveries were on the cards.
“As a debutant Finance Minister, he might have taken a soft approach with his first budget which is an interim budget,” Palanisamy said.
Industry experts said Finance Minister Rajan’s budget is nothing but a status quo or an extension of the previous AIADMK government’s budget.
“The white paper set the expectation that the Finance Minister will provide a reform budget to reduce the state debt. One could agree that he needed more time to come up with the actual reforms but least expected was the transformation roadmap, a timeline,” Sriram Seshadri, Founder and Managing Partner, Disha Consulting and formerly Partner and Managing Director, Accenture India, told IANS.
According to him, a white paper lays down the problem, analysis, probable solution.
On the other hand, the government’s white paper laid out the problem statement which was well known and the expectations were there on reform proposals in the budget which surprisingly did not happen, Seshadri said.
“As an economist, I feel satisfied that the budget didn’t provide for any of the poll promises. For an economist the white paper gave an expectation that there would be a reform and transformation roadmap but the budget was disappointing,” he added.
According to him, nothing was there in the budget for beefing up the state revenues while the debt was increasing.
“Tamil Nadu will cross the debt of Rs six lakh crore mark by 2021 end. Only solace is during the budget discussions in the state Assembly, the Finance Minister has said some of the poll promises will not be met such as revising the old pension scheme for government employees,” Seshadri added.
He said if there is a reform agenda with the DMK government it has to be rolled out soon and not wait for the next year’s budget.
However, he agreed that the government will take some reform steps mainly targeted subsidies to poor sections of the society, refine the rules for ration cards and revenue optimisation initiatives like tax reforms.
“Already Tamil Nadu’s economy is the fourth largest in the country and will slip to fifth or sixth place soon. Hence, the state should regain the momentum, cut the red tape and enable ease of doing business both in MSME and large industries,” Seshadri said.
While the government’s popularity endures it should take some tough decisions to reduce government spending, disinvestment and make announcements to attract investment, he said.
“Sterlite Copper (copper smelter unit of Vedanta Ltd in Tuticorin) closure is one of the stumbling blocks for investors to invest in a big way because there is no guarantee to their investment. The government should enable reopening of Sterlite within the guidelines of the pollution control norms. Likewise closely monitor to optimize revenue on the natural resources, mining and sand. The government gets less than Rs 1,000 crore revenue whereas the potential is much higher,” he added.
However, the signs of change in the government are seen in the budget by not implementing its populist poll promises like Rs 1,000 per month dole to the female head of the family.
“Instead the government had decided to conduct a study to identify eligible beneficiaries. This move is new as in the past the state government used to disburse financial assistance for almost all ration card holders,” K. Puhazhendi, Director, Perfint Healthcare, told IANS.
Referring to Rajan’s statement that the governance will be data-based, Puhazhendi said the government can mine data available in its own departments/municipal corporations.
The smart ration cards are linked with Aadhar cards.
Puhazendhi said the government employees themselves form a big database so that undeserved subsidies can be stopped.
“Data on property taxpayers, land owners, vehicle registrations, power consumers, ration card holders, data about government employees, shops and business establishments, factories and other data are available with different departments,” Puhazhendi said.
The government can collate and gather from the people with help of door-to-door data gathering. This could be a starting point to build a database and target the subsidies and other government schemes, he added.
Stressing that the government’s focus should be on making each department, municipal corporations self-financing, Puhazhendi called for a freeze on government hiring and investment should be made in information technology systems to digitise the services.
It is high time the state government goes in for public-private partnership in the tourism sector. The state government owns several hotel properties which are in need of private investment and management.
Mumbai, May 4: Gold and silver prices declined up to 1 per cent on Monday amid signs of easing geopolitical tensions between the US and Iran, following remarks by US President Donald Trump.
On the Multi Commodity Exchange (MCX), gold contracts for June 5 opened at Rs 1,51,150, down Rs 382 or 0.25 per cent from the previous close of Rs 1,51,532.
At around 11.30 a.m., gold was trading at Rs 1,50,623, lower by Rs 729 or 0.48 per cent. The yellow metal touched an intraday low of Rs 1,50,400, a decline of 0.62 per cent or Rs 952, and an intraday high of Rs 1,51,347.
On the other hand, silver contracts for July 3 opened at Rs 2,50,699, down Rs 238 or 0.09 per cent compared to the previous close of Rs 2,50,937. The white metal was trading at Rs 2,49,600, down Rs 1,337 or 0.53 per cent.
So far in the session, silver futures hit a low of Rs 2,49,600, a decrease of 1.05 per cent or Rs 2,599, and a high of Rs 2,51,231.
Meanwhile, in the international market, both precious metals remained under pressure. COMEX gold was down 0.55 per cent at $4,619 per ounce, while silver declined 0.48 per cent to $76.065 per ounce.
A commodity market expert said gold prices extended last week’s decline, hovering near one-month lows, as a stronger dollar and elevated crude oil prices weighed on sentiment.
The expert further noted that while easing US-Iran tensions reduced some safe-haven demand, supply risks in the Strait of Hormuz continued to fuel inflation concerns, prompting a cautiously hawkish stance from major central banks, which also weighed on bullion.
US President Donald Trump said the United States would initiate efforts to help vessels stranded in the Strait of Hormuz, describing the move as a humanitarian gesture aimed at assisting neutral countries not involved in the ongoing US-Iran conflict.
According to Trump, Washington would launch ‘Project Freedom’ to guide the stranded ships and their crews safely through the route.
However, he warned that Iran would face a strong response if any threat emerged.
In addition, crude oil prices declined sharply.
Brent crude fell 0.61 per cent to $107.51 per barrel, while US West Texas Intermediate (WTI) dropped 2.77 per cent to $99.11 a barrel.
New Delhi, May 3: Amid the ongoing West Asia conflict, OPEC+ countries have agreed in principle to raise oil output targets in June.
Multiple reports say that seven OPEC+ countries have agreed to raise oil output targets by about 188,000 barrels per day next month. The output hike would rather be largely symbolic until Strait of Hormuz reopens.
This will be the third consecutive monthly increase amid the geopolitical crisis and the departure of the UAE from the group.
With the UAE leaving, OPEC+ includes 21 members, including Iran.
However, only the seven nations (and the UAE) have been involved in monthly production decisions. Iran, also an OPEC+ member, has seen its own exports dwindle amid the blockade.
Crude oil output from all OPEC+ members averaged 35.06 million bpd in March, down 7.70 million bpd from February.
Last week, the UAE announced it was leaving the OPEC and OPEC+ cartels in what is seen as a major setback to the group of oil-exporting countries led by Saudi Arabia. The UAE said the decision reflected its “long-term strategic and economic vision and evolving energy profile”.
The exit of the UAE is expected to weaken the oil cartel at a time when the Persian Gulf countries have taken a huge hit to their exports due to the closure of the Strait of Hormuz by an embattled Iran. The UAE accounts for around 15 per cent of the OPEC oil exports.
Reports also surfaced that Kuwait exported zero barrels of crude oil in April, a situation not seen since the 1991 Iraqi occupation, due to blockade of the Strait of Hormuz.
Kuwait Petroleum Corp declared force majeure, impacting around 2 million barrels per day. The blockade has led to a complete disruption in Kuwaiti exports.
Meanwhile, oil prices dropped after reports said Iran proposed fresh talks with the United States using Pakistan as a mediator.
West Texas Intermediate fell more than five per cent and dropped below $100 per barrel. It later recovered to $101.7.
Brent crude also fell more than three per cent to $106.98 before rising again to $108.4.
New Delhi, Gold prices dipped 0.81 per cent during the week as negotiations between the United States and Iran stalled, denting hopes for near‑term interest‑rate cuts.
On Friday, MCX gold June futures gained 0.01 per cent while MCX silver May futures inched up 0.49 per cent. Currently, gold futures stand at Rs 1,51,363, while silver futures stand at Rs 2,47,500 per kg.
The price of 10 grams of 24-carat gold was at Rs 1,50,263 on Thursday, down from Rs 1,51,495 seen on Monday market opening, according to data published by the India Bullion and Jewellers Association (IBJA).
In international markets, bullion dropped as much as 1.2 per cent on Friday after gaining 1.5 per cent in the previous session, weighed down by rising energy costs and firmer Treasury yields. Gold has fallen nearly 14 per cent since the US-Iran conflict began on February 28, 2026, traders said.
The Iranian administration maintained that the US blockade would have to end before the Strait of Hormuz could be reopened, according to multiple media reports. Iranian state media said that Tehran had delivered a fresh proposal for talks to Pakistani mediators, but both sides signalled they were waiting for the other to make the first move.
“While diplomatic engagements remained active, the absence of a decisive breakthrough kept the geopolitical risk premium firmly embedded in prices,” an analyst said.
US inflation data showed the headline PCE price index at 3.5 per cent in March, at its highest level in nearly three years, reinforcing the view that policy rates may stay higher for longer.
Analysts said that rising energy prices could lead to central banks maintaining interest rates higher for longer, which would pressure non-yielding assets like gold.
Crude oil traded with heightened volatility through the week but retained a firm undertone, holding near elevated levels as concerns around potential supply disruptions persisted. The market continues to price in risks to global oil flows, limiting meaningful downside and providing support on dips.
Precious metals entered a phase of corrective consolidation following their recent safe-haven rally, analysts said.
Gold and silver witnessed intermittent profit booking at higher levels through the week, while selective buying interest emerged near key support zones. Safe-haven demand has eased marginally but continues to lend support on declines amid lingering uncertainty.
COMEX gold traded near the $4,620–$4,650 zone, and a major resistance is seen at the $4,700–$4,760 levels. Overall, the trend remains constructive with a cautious near-term bias, with strength dependent on a breakout above resistance.
COMEX Silver is currently trading above $76, and the broader trend remains constructive but with a cautious near-term bias, market participants said.
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