Tamil Nadu: a trendsetter for all-round development

The communicative of Tamil Nadu’s post-Independence economical improvement stands retired from those of galore different States successful the country. From the beginning, the governmental leadership, careless of affiliation, has consciously followed policies that are aimed astatine ensuring an adjacent organisation of development. In this respect, it has been aided by an progressive and self-effacing bureaucracy and a responsive concern community.

Unlike successful different States specified arsenic Maharashtra and Karnataka, wherever economical enactment is concentrated successful a mates of cities, Tamil Nadu has been witnessing dispersed development. Besides Chennai, the State has different municipality centres — Coimbatore, Madurai, Tiruppur, Tiruchi, Vellore, and Salem — contributing importantly to its system and helping span the urban-rural divide. The dispersed of enactment tin beryllium seen from the determination of a big of spinning mills successful the occidental territory of Tiruppur (which accounted for 55% of the country’s knitwear exports to the tune of ₹30,690 crore successful 2023-24, providing jobs to six lakh persons) to lipid refineries and fertiliser accumulation successful the bluish territory of Tiruvallur. Calendar- and cracker-making units successful the confederate territory of Virudhunagar, cement accumulation successful the cardinal territory of Perambalur, and beedi-making and mat-weaving successful Tirunelveli are besides a testament to this fact.  

Tamil Nadu is the astir urbanised State successful the country, with adjacent to 50% of the colonisation surviving successful municipality areas, according to the 2011 Census. The State not lone had the first-mover vantage during the ‘Licence Raj’ successful creating a coagulated basal successful manufacturing, but besides did not lag down others successful taking to accusation exertion (IT) and IT-enabled services (ITES) successful the post-1990 ‘economic reforms’ era.   

In the Sustainable Development Goals (SDG) India Index 2023-24 published by the NITI Aayog successful 2024, Tamil Nadu emerged arsenic a frontrunner, reflecting the State’s dedicated efforts and broad policies connected sustainable development. The composite people for Tamil Nadu roseate to 78 successful the variation successful question — a singular emergence from 66 successful 2018. The upward trajectory placed the State among the apical performers crossed the nation, underscoring its committedness to societal equity, economical growth, and biology sustainability. The State ranks 2nd successful debased babe mortality and debased commencement rate, and 3rd successful the Health Index.It is known for its innovative payment schemes specified arsenic the noon-meal strategy — doubly revived successful 1956 and 1982, with improvements made implicit the erstwhile versions — and the old-age pension scheme, introduced successful April 1962. Today, these schemes are implemented crossed the country. 

Even successful the tract of institution-building, the State is simply a trendsetter, arsenic it had, wrong 2 years of freedom, acceptable up what is present called the Tamil Nadu Industrial Investment Corporation (TIIC) to grip semipermanent financing. This was accomplished erstwhile the beingness of specified a State-level assemblage was mostly unheard of successful the country. The TIIC’s beingness came successful useful precise shortly, arsenic K. Kamaraj, who was Chief Minister of the State from 1954 to 1963, had realised that superior successful his State was mediocre and shy. To flooded this limitation, helium enabled the Corporation to enactment successful the stock superior of backstage enterprises, an enactment described arsenic “bold and imaginative” by R. Venkataraman, who was the Industries Minister during 1957 to 1967, successful an nonfiction successful The Hindu connected July 15, 1964. Building connected what it did with schoolhouse acquisition successful the aboriginal 1980s, the State, successful the mid-1980s, opened up higher acquisition to the backstage sector, facilitating the enactment of a fig of engineering and aesculapian colleges. Naturally, the State has developed a coagulated web successful definite aspects of nonrecreational education: arsenic of now, determination are 22 self-financing backstage aesculapian colleges, 4 backstage universities, and 13 colleges affiliated with deemed-to-be universities. In engineering and architecture, determination are 429 self-financing colleges, isolated from 11 authorities colleges. 

Accounting for 4% of India’s onshore country and 6% of the country’s population, Tamil Nadu contributed 9.21% to the nationalist GDP successful 2024-25, ranking 2nd lone to Maharashtra. Its Gross State Domestic Product (GSDP) astatine changeless prices (2011-12 series) reached astir ₹17.23 lakh crore, reflecting the existent economical maturation of 11.19% implicit the erstwhile year. In fact, the State was the lone 1 to registry a double-digit maturation complaint successful the twelvemonth successful question, too having the maturation complaint successful treble digits aft a spread of 14 years. Broadly, the respective shares of the superior (agriculture and allied activities), secondary (industry), and tertiary (services) sectors successful the GSDP of the State are 13%, 34%, and 53%.

Prime mover successful irrigation

At the clip of Independence, Tamil Nadu’s system was fundamentally agrarian. Served by the inter-State and contentious stream Cauvery, the cardinal portion of the State, encompassing districts specified arsenic Thanjavur, Tiruvarur, Mayiladuthurai, and Nagapattinam, had a well-developed irrigation web astir 2,000 years ago. Even though it had undergone a fig of changes implicit the years, the infrastructure was robust astatine the opening of the 20th period CE. The Supreme Court judgement of February 2018 connected the Cauvery quality states that anterior to 1924, erstwhile the inter-State statement was signed betwixt Tamil Nadu, the little riparian State, and Karnataka, the precocious riparian State, the country nether irrigation successful the erstwhile was astir 15 lakh acres, whereas the latter’s sum was hardly one-third of that. The delta’s value tin beryllium seen from the information that the region, regarded arsenic the atom vessel of the South, accounts for astir one-third of paddy cultivation successful the State — 18 lakh acres retired of a full of 52 lakh acres. Needless to say, paddy has been the superior harvest of the farmers successful Tamil Nadu.

It was during the contiguous post-Independence play that Tamil Nadu recovered that determination were not galore irrigation schemes for the drought-prone areas successful the occidental loop — Coimbatore, Tiruppur, and Erode districts. This led to the commencement of the Parambikulam-Aliyar Project (PAP) aft an inter-State knowing with Kerala successful 1958 implicit the diversion of west-flowing rivers to irrigate the occidental portion of Tamil Nadu. A towering fig of the Congress, C. Subramaniam, who hailed from the region, played a cardinal relation successful getting the task disconnected the ground. He occupied precocious positions some successful the State authorities — Finance Minister (1952-62) — and astatine the Centre — Minister for Steel, Food and Agriculture, Planning and Finance (1962-67 and 1971-77). Now hailed arsenic a awesome of inter-State cooperation, the PAP irrigates astir 4.2 lakh acres. With the conjunctive usage of groundwater, farmers nether the PAP are “far much enterprising” than their counterparts successful the Cauvery delta, says a elder h2o expert, adding that the occidental region’s agriculturists person besides taken to micro-irrigation to a important extent.   

It is not conscionable that. Many of the farmers person diversified from agriculture into manufacture and higher education. Such diversification does not look to person happened elsewhere successful Tamil Nadu, adjacent though successful different regions of the State, including the bluish districts, millets, pulses, and sugarcane are raised successful a important way, too paddy. While the expanding inclination of mechanisation and the adoption of the System of Rice Intensification (a method aimed astatine little utilisation of water, seeds, and different inputs) are among the caller features of farming successful the State, chronic and wide characteristics of the cultivation activity, arsenic seen elsewhere, are besides present. They see the predominance of marginal landholdings, an unreliable climate, and the paucity of cultivation labour. Still, Tamil Nadu is regarded arsenic 1 of the large States with productivity higher than the all-India mean successful oilseeds, groundnut, sugarcane, maize, and paddy, according to the Agricultural Statistics astatine a Glance (2023) published by the Department of Agriculture and Farmers Welfare of the Union government. Even though the State does not nutrient fabric successful ample quantities, it is location to the largest fig of spinning mills. 

Birth of concern estates 

In 1 of his talks successful Chennai during August 1990, Venkataraman, who, by then, had go President of India, recalled that “apart from the textile manufacture and a fewer sweetener factories, determination were nary large industries worthy mentioning astatine that clip [in the aboriginal 1950s]. Modern tiny industries utilizing powerfulness and up-to-date machinery and employing specialised methods were astir absent. Madras was regarded arsenic a benighted cultivation province, with small power, superior and infrastructure. The provincial medication besides lacked enterprise. It refused to bargain up the Madras Tramways which was closing down [in April 1953] for a sum arsenic debased arsenic Rs. [sic] 19 lakh.” It was against this backdrop that the Congress government, nether Kamaraj’s leadership, launched a “massive programme” of industrialisation, Venkataraman recounted.       

In an nonfiction published successful The Hindu connected September 1, 1965, RV, arsenic the erstwhile President was besides called, explained the rationale down the authorities intervention, citing the “scanty availability” of earthy resources, the request for transporting earthy materials and substance implicit a agelong distance, and the reluctance of the tiny entrepreneurial people to invest. This was wherefore a “string of concern estates”, arsenic phrased by RV successful his Chennai speech, came into being, paving the mode for a vibrant micro, small, and mean enterprises (MSMEs). Today, the Tamil Nadu Small Industries Development Corporation Limited (TANSIDCO) maintains 135 Industrial Estates dispersed implicit astir 8,880 acres. As for the spot of MSMEs, which person registered themselves with the Udyam portal of the Union MSME Ministry, determination are astir 33.6 lakh — astir 70% of them being successful services. As an denotation of Tamil Nadu’s exemplary of inclusive growth, 30% of MSM entrepreneurs are women. With respect to the societal premix of ownership of astir 8.56 lakh units, arsenic recorded by the Office of the MSME Development Commissioner successful the Union authorities arsenic of March 31, 2022, Other Backward Classes (OBCs) successful the State owned astir 3.37 lakh MSMEs, accounting for astir 40%, and Scheduled Castes (SCs) owned 50,908 units, oregon astir 6%.

Commenting connected RV’s enactment arsenic Industries Minister (1957 to 1967) of the State, seasoned industrialist T.T. Vasu wrote successful The Hindu on August 8, 1991: “A assortment of industries, big, medium, and small, dotted the landscape. Aluminium, steel, chemicals, paper, ceramic, automobile, and different engineering industries came up.”  The process of industrialisation, initiated during the Congress regime, has been carried guardant by the successive DMK and AIADMK governments with varying degrees of enthusiasm and interest. The cumulative interaction of specified an attack is rather positive: Tamil Nadu has go the country’s astir industrialised State with the highest fig of factories (39,700), employing 2.8 cardinal people, according to the Invest India portal of the Union government. It is the foremost exporter of physics goods, accounting for implicit 30% of India’s physics exports. In presumption of full exports from the State, the worth was astir $52 cardinal successful 2024-25. 

Among the important Central assemblage projects that the State witnessed during the 1950s and 1960swere: the Integral Coach Factory (ICF) successful Chennai, wherever the country’s archetypal hydrogen-powered bid manager was tested successful July 2025; the Neyveli Lignite Corporation, which has powerfulness units of astir 3,400 megawatt (MW) successful Neyveli; and the Bharat Heavy Electricals Limited (BHEL) successful Tiruchi, which operates crossed the powerfulness and concern sectors, offering broad solutions, including the proviso of equipment, systems, and services. In the past 20-odd years, the Kudankulam Nuclear Power Project, wherever 2 units of 1,000 MW are successful operation, has been taken up by the Union government. Four much units of 1,000 MW each are being established. 

The State’s full installed energy capableness from each sources of vigor stood astatine adjacent to 40 GW successful 2024-25, of which accepted sources accounted for 16.7 GW and renewable energy, 23 GW. Again, a pioneer successful tapping upwind energy, the State’s installed upwind capableness was 9.3 GW, and star 10 GW. As the Tamil Nadu Power Distribution Corporation has astir 30.44 cardinal consumers, including implicit 20 cardinal home consumers crossed the State, the authorities should make determination organisation companies for quicker and amended transportation of services. The operation sub-sector is expanding astatine much than 5% per year, further driving request for vigor and earthy resources. 

Thriving services 

Tamil Nadu’s services (or tertiary) assemblage is divers and includes respective sub-sectors specified arsenic trade, repair, hotels and restaurants, transport, storage, connection and broadcasting services, fiscal services, and existent estate. The State, with its beardown beingness successful the IT and IT-enabled services sectors, is simply a large contributor to bundle exports. Like different States, the work assemblage plays a pivotal relation successful driving Tamil Nadu’s Gross State Value Added (GSVA). In 2024-25, the services accounted for ₹8.13 lakh crore astatine changeless prices (base year: 2011-12), contributing astir 53% to Tamil Nadu’s full GSVA. Placed adjacent to Karnataka, Maharashtra, and Telangana successful bundle exports, the State saw a dependable summation successful this conception of exports from ₹46,704 crore successful 2019-20 to ₹73,969 crore successful 2022-23, according to the Tamil Nadu government’s Economic Survey for 2024-25. The grade of heightened economical enactment successful the State tin beryllium observed from the credit-deposit ratio (CDR) with recognition exceeding deposits. The Survey points retired that successful 2023-24, Tamil Nadu disbursed credits of ₹15,82,851 crore, whereas it received deposits of ₹13,44,553 crore. Naturally, it is among the apical 3 States with respect to the CDR. Despite having 4 planetary airports, Tamil Nadu missed the autobus astir 10 years agone vis-à-vis Karnataka and Telangana erstwhile it came to upgrading its largest airport, Chennai Airport. Now, steps are nether mode to physique a greenfield airdrome successful Parandur. The Chennai Metro Rail Limited (CMRL) has seen dependable enlargement implicit the years, enhancing municipality mobility and connectivity. The State authorities has sought support from the Union authorities for Metro Rail projects successful Coimbatore and Madurai. As regards the roadworthy sector, the full magnitude of roads successful the State is 74,955 km, including the National Highways’ stock of 6,805 km.

In retail trade, the State became known, by the precocious 1980s, for having sprawling retail outlets, the likes of which were not seen successful galore different places. This came astir good earlier the conception of malls caught up with galore cities crossed the country. The standalone sprawling retail showrooms, arsenic recovered successful T. Nagar (Chennai’s cardinal concern hub), are chiseled from malls. One of the important constituents of the services assemblage is the movie industry, which has been playing a important relation successful galore aspects of beingness successful the State, including politics. Once the centre of southbound Indian diagnostic films, Chennai housed bequest studios specified arsenic Gemini, Vijaya-Vauhini, and Prasad. According to an estimate, Tamil cinema generated ₹3,500 crore successful 2023, covering collections from cinema halls, OTT platforms, and euphony rights.

It is simply a tribute to the political, administrative, and societal situation of Tamil Nadu that determination are astir 130 planetary Fortune 500 companies successful the State. Nearly one-third ($6.8 billion) of the country’s exports successful automotive and car components comes from the State, according to a papers of the Tamil Nadu government. The State besides produces 25% of the country’s rider cars and 36% of two-wheelers. The incumbent DMK government, too formulating a fig of well-meaning policies, has besides been giving value to accomplishment development.  

Inter-regional disparity

However, the State is facing a fig of challenges successful each 3 wide sectors of the economy. The Economic Survey captures immoderate of these challenges — namely, clime change, demographic shifts, technological disruptions, and changing employment landscapes. Inter-regional disparity is peculiarly glaring. Although the State’s wide per capita income of ₹2.78 lakh (2022-23) is higher than the nationalist mean of ₹1.69 lakh, 30 of the 38 districts successful the State person a little per capita income than the State’s average. 

The Survey goes connected to authorities that Tamil Nadu “also needs to ore connected processing agrarian entrepreneurship to dispersed maturation crossed each the districts of the State. It should leverage its demographic vantage by expanding the accomplishment endowment of the youth, encouraging women to enactment successful the workforce, and promoting high-value manufacturing and services, including frontier technologies,” the papers adds. 

Given the State’s agelong coastline extending for 1,076 km, and the grade of effectual inland h2o resources implicit 3.85 lakh ha, K.R. Shanmugam, erstwhile Director of the Madras School of Economics, suggests that sportfishing — some marine and inland — beryllium promoted much actively than it presently is. In the dairy sector, determination is tremendous scope for improvement, arsenic the State is placed 11th astatine the all-India level successful beverage production, contempt having a well-established web of cooperative societies successful agrarian areas (numbering astir 9,300) for beverage procurement.  

Southern districts, which correspond 18.8% of the system and 20.5% of the colonisation successful the State, person been lagging down others owed to a assortment of reasons, including chronic h2o shortage. A elder authoritative of the State authorities feels that the concern volition alteration for the better, arsenic a fig of measures are being taken to close it. The confederate portion whitethorn witnesser translation erstwhile the All India Institute of Medical Sciences (AIIMS) hospital  successful Madurai becomes afloat operational and the Thoothukudi larboard acquires a greater relation successful the State economy, the authoritative hopes, adding that the imaginable for escapade tourism, practice tourism, and eco-tourism has not yet been afloat tapped. 

Speaking of issues being faced by women successful the State, the Survey points retired that “despite having 1 of the highest Labour Force Participation Rates (LFPR) for women successful India, determination is inactive sizeable scope to summation this rate. The gross enrolment complaint for women successful tertiary acquisition is 1 of the highest successful the country, but the information of specified skilled women is comparatively low.” 

Tamil Nadu, having achieved important advancement successful galore fields, is astatine a crossroads, arsenic the State indispensable spell a agelong mode successful eliminating inter-regional disparities and ensuring economical equity. It is up to the governmental leadership, intelligentsia, and civilian nine to emergence to the juncture and marque Tamil Nadu fig 1 successful each facet of life.

Economic growth: A comparison

Source: Documents from the Union Planning Commission, Tamil Nadu Planning Commission, and Finance section of the Tamil Nadu government