1. Tamil Nadu – Industrial hub? Or Bane?

Tamil Nadu – Industrial hub? Or Bane?

Tamil Nadu was predominantly an agrarian economy and is the largest producer of corn, groundnut, oil seeds and sugarcane in India.

Updated: May 3, 2018 5:32 PM
tamil nadu, india, economy, indian economy, gdp, Madras Medical College, tamil nadu education, GDP contribution Tamil Nadu received less than 1% of the ?3.95 lakh crore investments attracted by various states across the country in the year 2017.

Tamil Nadu was predominantly an agrarian economy and is the largest producer of corn, groundnut, oil seeds and sugarcane in India. With early investments in the field of education; from housing one of the oldest medical colleges in India (Madras Medical College, estd. 1835) to setting up the third IIT in India (IIT Madras, estd. 1959), TN has been a powerhouse in generating skilled workforce. It is the availability of such skilled workforce, investment friendly policies and global access with road and rail network, airport and sea port, which has attracted investments from difference corners of the world. Today, Services contributes to 45%, Manufacturing slowly catching up at 35% and agriculture at 21% of GSDP. Chennai proclaimed as “Detroit of Asia” – is the manufacturing hub for many automobile manufacturers. It comprises of home-grown auto companies like: Royal Enfield, Ashok Leyland, Tractors and Farm Equipment (TAFE) and TVS Motors; and many conglomerates who had chosen Chennai to be their hub for Indian and South-East Asian market: Ford, Hyundai, Renault-Nissan, Daimler, Bharat-Benz and Mitsubishi; These automobile manufacturers have in turn drawn investments from multiple auto component manufacturers. Apart from automobile, investments in Tamil Nadu are diverse in fields varying from medicine to textile to fireworks and off late – wind mill component manufacturing. Today, Tamil Nadu is standing tall as the second richest state of India (GDP contribution to the GOI).

The future

Whatever we have achieved till date in-terms of excellence in services, manufacturing growth has enabled us to contribute effectively to India – as a developing economy. But the road ahead is different, India as a country is striving to transform into a developed economy. And our contribution as a state to that transformation is integral. Our alignment in-terms of technology, education, policy making should align with that transformation. We need to upgrade our educational institutions to empower our future generations to be a pioneer in renewable energy sources, adopt to clean power generation and usage (read electric vehicles).

Right Steps

Chief Minister Palaniswami, Industries Minister MC Sampath, Chief Secretary Girija Vaidyanathan, Finance Secretary K Shamugam and Additional Chief Secretary-Industries K Gnanadesikan have provided assurances in January this year of their wholehearted backing of organizations operating in the state. Their willingness to meet with industry leaders, and provide easy access to senior government officials for members of the Confederation of Indian Industry was a great step forward for the state government, and was well appreciated by industry leaders. The prospect of existing infrastructure in the state being leased out to investing organizations for production was noted as a positive sign around the country and in investment circles. This willingness to meet with leaders across industries and work to address their challenges was seen as a significant step towards enhancing growth in the state.

The Hurdle

Tamil Nadu received less than 1% of the ?3.95 lakh crore investments attracted by various states across the country in the year 2017. It drew a mere ?3,131 crore, or less than 1% (0.8%) of the total investments in the country, through 62 proposals last year.

“Our state lost opportunities, especially from Kia Motors (which has broken ground in Andhra Pradesh)” said CII-Tamil Nadu chairman P Ravichandran. While the share of investments attracted by Tamil Nadu has been on a downhill since 2015, it has been increasing in Karnataka, Andhra Pradesh, Telangana, Gujarat and Maharashtra, according to data compiled by Department of Industrial Policy and Promotion (DIPP), Union ministry of commerce & industry.

With the intention of promoting industries in Tamil Nadu, SIPCOT has created 20 industrial estates including six special economic zones in 31,465 acres spread in 12 districts. The industrial estates are functioning at Nilakottai, Nanguneri, Gangaikondan, Manamadurai and Tuticorin at present. The Madurai – Tuticorin industrial corridor was envisaged to boost the industrial growth of the region. The land acquisition work for 19,615 acres in nine districts are in various stages at present. Once the corridor becomes a reality, industrial growth will be boosted in southern Tamil Nadu, said State industries minister, M C Sampath

Despite such industry friendly schemes, the current scenario in Tamilnadu is not providing confidence to invest in the State. The protests against various key government and private sector projects has given an opportunity to Andhra Pradesh and Telangana to woo the investors.

Industrial growth has been the backbone of the state and all political parties should come together to further this cause. From being the top investment destinations a few years back to becoming the 12 th rank even beyond states like West Bengal and Odisha should be a cause of concern to all.

The Global Investors Meet conducted in 2015 saw MOUs from various companies promising an investment of Rs 1 lakh crore in Tamilnadu but most of these investments have remained on paper.

If TamilNadu has to regain its spot among the top investment destinations of India the Government, Bureaucracy should focus on moving towards a Transparent and conducive policy for industrial development and general public should also come together to show a welcoming attitude towards industries.


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