With its Assembly elections less than a year away, Tamil Nadu faces a pivotal moment in its pursuit of an upper-middle-income economy. Distinct historically, the State has long resisted national homogenising forces, forging its unique political and social identity. This trajectory is now being tested by complex economic challenges and an assertive central government. The years ahead will determine whether Tamil Nadu can sustain its equitable growth model and preserve its ideological moorings amidst new political realities. Tamil Nadu’s political landscape has long been defined by two distinct Dravidian strands. The Dravida Munnetra Kazhagam (DMK), known for what political scientist Narendra Subramanian calls its ‘assertive populism’, leveraged social justice and federalism to uplift marginalised groups. Despite criticisms of patronage, the DMK’s ideological commitment has been consistent.
Conversely, the All India Anna Dravida Munnetra Kazhagam (AIADMK) practised ‘paternalistic populism’, prioritising patronage and welfare over ideology. Led by charismatic figures such as M.G. Ramachandran and J. Jayalalithaa, the AIADMK united diverse anti-DMK forces, from traditional upper-caste Congress supporters to landowning castes and welfare beneficiaries. It also mobilised Dalits against intermediate castes dominant in the DMK, forming a stable bipolar system, with the AIADMK as the DMK’s enduring adversary.
This bipolar Dravidian system, while fostering patronage and corruption, also drove a competitive populist economic model. This facilitated comprehensive industrialisation as well as welfare in health, education, and services. The State’s political exceptionalism has been crucial to its economic success, making it a beacon of inclusive growth, India’s second largest economy, and significantly reducing poverty.
However, the Dravidian model has its limitations. Its competitive populism has delivered impressive quantitative outcomes such as good high school enrolment, extensive health care, and widespread industrial growth, but quality has often lagged. Learning outcomes are mediocre, employment quality needs improvement and unchecked industrial growth has degraded the environment. Critically, policies designed for the inclusivity of Other Backward Classes (OBC) may have reinforced caste divisions. Despite the State’s social justice rhetoric, there is persistent and deep-seated casteism with ongoing discrimination against Dalits and inter-caste tensions. The focus of the Dravidian parties on caste-based mobilisation, while politically successful, has often institutionalised rather than transcended caste identities.
The rise of the BJP
The national ascendancy of the Bharatiya Janata Party (BJP) has fundamentally disrupted this binary system. Lacking significant ideological traction in Tamil Nadu, the BJP has sought to carve out space for itself by fracturing the AIADMK’s traditional base, and fostering internal dissension and multiple splits. The irony is stark: a disarrayed AIADMK is now in alliance with the very force that is threatening its ideological and electoral space.
This opportunistic alliance now prioritises dislodging the DMK over ideological alignment. The AIADMK cynically leverages the BJP’s central strength: blaming the DMK government for failures in securing central funds or abolishing the National Eligibility-cum-Entrance Test (NEET)-UG despite the Centre’s refusal. More alarmingly, the AIADMK, under the leadership of Edappadi K. Palaniswami, a former Chief Minister, has now sought to use the BJP’s corrosive ideology as a crutch, seen in his criticism of the current government using temple funds to construct colleges.
The DMK’s strategy, in response, has been astute: forging a robust ideological alliance with the Congress, Left parties, and the Dalits-led Viduthalai Chiruthaigal Katchi (VCK) among others. Chief Minister M.K. Stalin’s accommodative leadership has maintained cohesion, with the perceived threat of BJP hegemony providing an ongoing ideological imperative. The coalition’s strong anti-BJP stance, crucial for cohesion, has also risked unfavourable central policies.
The strength of this alliance lies in its inherent framework of mutual accountability. The Congress ensures a national perspective while the Left parties ensure awareness of worker and peasant and environmental issues, pushing beyond narrow industrial progress. Crucially, the VCK’s presence represents a corrective mechanism to the DMK’s historical limitations — anchoring the alliance to a comprehensive understanding of social justice that extends beyond OBC mobilisation to include Dalit recognition and upliftment — seen in the alliance’s attempts at addressing caste discrimination and caste hierarchy more robustly.
Tamil Nadu’s active civil society further underpins the State’s ideological bedrock, championing a nuanced secularism. Unlike other States, where secularism can be defensive, Tamil Nadu’s communities often identify as Tamilians alongside their religious identities, fostering inter-religious bonds. Rationalist movements, film-makers and writers have created popular support for progressive policies that attack casteism, patriarchy, and superstition whilst enabling redistributive governance. However, this intellectual and social foundation now faces its greatest test as the political landscape fragments.
Four-cornered contest, implications
Today, Tamil Nadu faces a new four-cornered contest. The economic implications are profound. New charisma-driven forces have emerged. Actor Vijay’s Tamilaga Vettri Kazhagam (TVK) attempts to replicate the AIADMK’s matinee idol success with superficial Dravidian and social justice assertions. Conversely, film-maker Seeman’s Naam Tamilar Katchi seeks to redefine Tamil nationalism away from its Dravidian core.
This fragmentation threatens to exacerbate the existing limitations of the Dravidian model. The AIADMK-BJP alliance aims to exploit rather than resolve caste tensions. Parties such as the Pattali Makkal Katchi, mobilising specific caste identities, have aligned with the BJP for narrow identitarian gains. These formations offer little towards solutions for environmental degradation, gender discrimination or improving education and employment quality — causes of concern in an otherwise developing State.
The DMK alliance’s progressive framework offers superior conditions for economic transformation. Its emphasis on secular outcomes and social amity creates the governance capacity needed for such transitions. This is aided by the internal dynamics of the alliance. This structure, despite contradictions, provides the best framework for evolving beyond the Dravidian model’s limitations while supporting social gains that are essential for economic progress.
The new fragmented political landscape could also affect the State’s economic trajectory. New battles rooted in casteism or communalism could threaten its ambitions. Social conflict approaches that pit community against community and propagate medieval communal values undermine this transition.
As the State seems to progress to an upper-middle-income economy, it must avoid the middle-income trap, shifting to an innovation-driven, high-value manufacturing model. This requires heavy investment in research and development, digital literacy, and diversifying exports into more higher-value products and services — all of which demand greater state facilitation and fiscal autonomy.
The State contributed 11.9% to India’s manufacturing GDP and has the most factories nationally. Its manufacturing sector grew at 8.33% between 2021-22 and 2023-24. Yet, a significant impediment is the central government’s increasing fiscal centralisation and anti-federal policies. The Centre’s broader fiscal policies increasingly constrain Tamil Nadu’s financial autonomy even as the State demonstrates economic vitality with State Goods and Services Tax (SGST) collections growing 20.12% to ₹35,414.05 crore in H1 2024-25, reduced fiscal allocations post-GST and higher cesses continue to cut mandated devolution. More concerning is its refusal of development funds to Opposition-ruled States as a form of political pressure.
Regional resistance to national relevance
These challenges highlight a broader strategic imperative for Tamil Nadu’s ruling alliance. Sustaining its distinct model requires moving beyond regionalism toward proactive coalition-building. As one State alone cannot effectively challenge central fiscal policies, coordinated opposition can create national pressure. Facing a hostile Centre, the DMK-led alliance must think beyond regional confines, mobilising opinion among other Opposition-ruled States on shared concerns: delimitation, a two-language policy, and greater fiscal decentralisation.
For the alliance to achieve its aims within Tamil Nadu, its national partners — particularly the Congress and Left — must actively foster a favourable discourse on federalism, social justice and secularism nationally. The political battles in Tamil Nadu are thus not merely about retaining power. They are about preserving a distinct model of governance and development that has delivered tangible progress. The stakes for Tamil Nadu, Indian federalism, and its diverse ethos, could not be higher.