The investor community in Tamil Nadu is perturbed by the passing away of Tamil Nadu chief minister J Jayalalithaa and the consequent appointment of O Panneerselvam to helm the state.
The investor community in Tamil Nadu is perturbed by the passing away of Tamil Nadu chief minister J Jayalalithaa and the consequent appointment of O Panneerselvam to helm the state. Tamil Nadu had emerged as one of the most industry-friendly states in the country under Jayalalithaa, and much of that progress took place as the chief minister herself had monitored the growth, aggressively pushing for all-round development across sectors.
Panneerselvam’s lack of experience in doing business with investors may be a worry, industry sources said. Investment proposals of over R2.4 lakh crore were attracted through the first-ever Global Investors Meet (GIM) in September 2015. Panneerselvam now needs to monitor these project proposals and ensure they get off the ground. He may be helped in this by Jayalalithaa’s Vision 2023 document, which could serve as a template for him.
During her tenure, Jayalalithaa was quick to pounce on new ideas and innovations to attract investments into the state. One such proposal was to develop industrial corridors. The government has been working on corridor-based development, particularly on the Chennai-Bengaluru and the Madurai-Thoothukudi Industrial Corridors.
Jayalalithaa was also keen on growing the manufacturing base in the state, clearly understanding that it would generate more employment opportunities, besides attracting much-needed investment. With a view to making Chennai as one of the top five global auto clusters, Tamil Nadu in 2014 had unveiled the first-of its-kind automobile policy and a fresh new industrial policy.
Jayalalithaa was particularly keen on developing Chennai as the Detroit of Asia, encouraging many auto firms to set up shop in the state. She had then said that the automobile policy will focus on future development and consolidation of the automobile and components industry, where Tamil Nadu enjoys a comparative advantage. It aimed to generate five lakh jobs.
During her first tenure as CM, the US auto giant Ford entered Tamil Nadu with its facility near Chennai. This was followed by a number of auto giants such as Hyundai, BMW, Mitsubishi and recent entrants like Renault-Nissan, Mahindra & Mahindra, Apollo Tyres, and JK Tyres, among other OEMs, apart from new parts vendors who invested thousands of crores in and around the Chennai region.
She had also set her eyes on sunrise sectors like biotechnology, aerospace and nanotechnology for garnering further investments. “This industrial policy has innovative features with a focus on creating a business-friendly environment with world-class infrastructure and to boost employment and skill levels obtaining in the state,” she had said.
Jayalalithaa transformed the state into a power surplus one from being a deficit state just a few years ago. Her decisions included attracting huge investments in both wind and solar energy sectors. Anticipating a surge in consumption demand, she also unveiled several projects worth another 6,000 MW in the next three to four years. Thanks to these efforts, Tamil Nadu is one of the largest economies in the country, achieving a growth rate of 8.79% during 2015-16.
According to CMIE, between April 2011 and June 2016, Tamil Nadu had attracted an incremental investment of Rs 3,75,908.55 crore, including both domestic and foreign investments, some of which are in the pipeline. The Tamil Nadu Investment Promotion and Guidance Bureau had facilitated 56 non-MoU projects through single-window facilitation with an investment commitment of Rs 11,282.52 crore in the said period.
According to the Department of Industrial Policy and Promotion, at the end of April 2011, Tamil Nadu was ranked fourth among all states in terms of actual foreign direct investment inflow, which was Rs 33,024 crore. By the end of March 2016, FDI inflow had increased to Rs 1,18,547 crore, taking the state’s ranking to third.
Being fully aware of the need for having a regional balance in the process of industrialisation, the Jayalalithaa government in its New Industrial Policy 2014 had included specific provisions for incentivising investments in the southern districts of the state. Recently, several projects like the Madurai-Thoothukudi Industrial Corridor and the National Investment and Manufacturing Zone at Ramanathapuram relating to the development of the southern districts have been fast tracked. Further, the Chennai-Bengaluru Industrial Corridor was also set in motion to attract investments on the other side of Tamil Nadu.