The Naxalites, the gheraoes and the endless morchas and bandhs drove investments away from Bengal.
The intellectual capital of India, once home to ideas, things and people, soon descended to be the home for agitators. Similarly, we have seen such thinning of industrial investments in Kerala in the south-west corner of India. Kerala of the 1960s was flourishing with commerce and industry with good banking, plantations, and other corporates - FACT, Travancore Cochin Chemicals, Travancore Rayons, Travancore Titanium, HMT and Hindustan Paper - to name just a few. But demonstrations began to be organised at the drop of a hat. Soon, industrial development suffered, most of Kerala’s famous businesses vanished and today the state lives on remittances from industrious Keralites working hard outside.
Such a disturbing trend today is fast enveloping Tamil Nadu; the state is getting the title of India’s ‘agitation capital’. Politically conscious, the state is deeply divided on caste lines. The recent report by the Bureau of Police Research & Development that points to Tamil Nadu as the state with the most number of agitations and disruptions. Protests rose by 55 per cent in India from 2009 to 2014.
In all, there were 420,000 protests all-India over the five years. The increase was driven by Tamil Nadu and Punjab which, between them, registered half the growth in protests nationwide. With almost 25 per cent of the total number of demonstrations, this more literate state reported more agitations than any other. Second-placed Punjab had only a little over third of that number! The state has been witnessing one unrest or other on a daily basis over the last four years.
When Thoothukudi was thriving
Look at the rapid industrial development registered by Tamil Nadu exemplified by Hosur, Sriperumbudur, Oragadam and Thoothukudi.
In the last four decades, Thoothukudi has been registering dramatic transformation. From the traditional base of the salt industry, fishing and the chemicals factory (of DCW), the district has registered spectacular growth.
SPIC flourished through the first two decades, supporting a large number of subsidiaries, including the Tuticorin Alkali Chemicals and vendor units. Sterlite Industries was the first large project set up in the state post 1991 liberalisation.
Three large-capacity power plants and some captive power plants for industrial units dot the town’s neighbourhood. There are plans to expand these capacities further. The major port at Thoothukudi has been a trigger for the rapid growth of the town and the hinterland of Tirunelveli, Ramanathapuram, Virudhunagar, Madurai, Tiruchy, Coimbatore and Tirupur. Coal, ilmenite, a wide range of fertiliser raw materials and chemicals, copper concentrate, edible oil, pulses, tractors and other engineering goods, textiles, etc, are among the products handled by this port.
With the port handling close to 50 million tonnes of cargo, the services sector, especially transport and banking, are flourishing.
The golden quadrilateral project that provided highspeed highway network connecting metros and major ports has come as a boon to Thoothukudi.
Apart from the flourishing traditional salt industry, marine product exports form another significant economic activity of this port town; its marine products are in great demand from the US, Europe, Japan and other advanced markets.
A large number of young women drawn from Assam and other northeastern states are employed in these export units. There is near full employment in the district.
The Madurai-Thoothukudi industrial corridor planned with massive investments promises an even more rapid expansion of economic activity.
Thus, Thoothukudi was recording one of the highest rates of economic growth, really.
Move from agriculture to industrialisation
Tamil Nadu has witnessed a more rapid shift from agriculture than most other states. The contribution of agriculture to the state’s GDP has fallen from over 50 per cent to just 8 per cent now.
The average annual rate of growth of foodgrain production in Tamil Nadu has been just 1.67 per cent compared to 11.13 per cent in Punjab and more than 4 per cent in UP and West Bengal. Tamil Nadu already witnesses large-scale migration from villages where there is shortage especially of male labour. Agriculture cannot continue to support direct employment. A large number of small holdings, of an acre or two, is left fallow as raising crops in these is not remunerative. Hence, thousands of agricultural graduates cannot get gainful employment in such small farms in the villages. These cumulatively result in constant demands for subsidies and government support.
The transformation of Sriperumbudur near Chennai should explain the benefits of such shift from agriculture to industry. There is a flourishing services sector engaged in transporting components and parts and moving out finished products; hundreds of shops and establishments that meet the varied requirements of the thousands of employees at these factories enjoy a decent standard of living not available for centuries for the farmers.
AIADMK general secretary J Jayalalithaa, in her first term as the Chief Minister, was effective in attracting prestigious projects like Sterlite, DuPont and Ford. The state did witness a few more mega investments in the first decade of the 2000s at Sriperumbudur, Oragadam, Thoothukudi, etc.
But there has been a slowdown and near drying up of investments since 2010. According to the latest report, Tamil Nadu’s rank has fallen from the 12th to the 18th place in industrial reforms and from 3rd to 6th place in business opportunities.
During 2016-17 the state’s manufacturing growth was just 1.65 per cent and the share of Tamil Nadu in the country’s foreign investments was 2.9 per cent. Apart from this, in the country’s total investment, Tamil Nadu’s share is just 0.79 per cent.
When private investments in the state have been falling, is it justified to call for the closure of even existing units through agitations and protests, mainly on political and emotional issues? The demand should be for proper regulation, ensuring compliance to stipulated environment norms. For Thoothukudi, an effective civic administration can solve its problems: civic amenities have not improved in line with the three-fold increase in population over the last four decades. There is the complaint of water shortage, pointing with nostalgia to river Thamirabarani not meeting the water needs.
The solution of desalination is at hand: with generation of so much power and salt, it should be possible to use technology to produce water in abundance. With so much of wealth generated in this town, tax revenues can be expanded manifold.
It is time to mull over this.
When a large nuke power plant was not spared
There was staunch opposition to the construction of the Koodankulam nuclear power complex; the agitation spread over months had substantial economic implications. The project was conceived in 1988, and after all the clearances, it was under construction for over a decade. A local leader, SP Udayakumar, gathered hundreds of fisher folks and effectively blocked entry into the plant, scaring away hundreds of workers. The Russian specialists with high reputation and capabilities were kept idle for months and several of them packed-up and returned home. Former President APJ Abdul Kalam visited the site and came out with the scientific rationale for producing nuclear power. The state government, at last, took firm action to proceed after expert committees set up by it also certified the safety of the plant. The production loss suffered by the power plant is estimated at Rs 14.4 crore per day for the 1000 MW unit. With the delay in starting the commercial operation, Koodankulam nuclear power project has caused a loss of over Rs 10,000 crore to the Nuclear Power Corporation of India Limited, a body responsible for operating nuclear reactors.
For over five years now, the project has been operating to full capacity, presently at 2,000 MW. The enormous investments of around Rs 15,000 crore, inflated by wanton delays, has been earned by now, thanks to continuous operations.
As the society evolves, traditional occupations will suffer a steep fall in their share of the GDP. For instance, agriculture has not been a highly remunerative occupation except for large-sized farms nurtured with science, technology and management. With low levels of productivity, especially at small parcels of land, agriculture has lost much of its viability.
World over, there has been an inexorable shift of employment from agriculture to industry and services.
Even countries that are highly developed today, like the US or Germany, were entirely agrarian until a couple of centuries ago: Hundred per cent of their population depended on agriculture till the 1700s. Today, this has reduced drastically. In the US, for instance, less than 2 per cent of her people is directly employed in farming.
In India, too, direct employment offered by agriculture today covers only around half of what it was a hundred years ago.
- Look at the present plight of this industrial town:
- DCW has been severely affected by the sudden restrictions in the export of synthetic rutile; over Rs 300 crore of export consignments are blocked.
- SPIC has been sick after its great growth-decades of the 1970s to early 1990s, due to the high cost of the feedstock and poor management.
- The private power generator Coastal Energen has failed to meet its financial commitments and the large power unit has been taken over by the main lender SBI.
- Tatas dropped the Rs 3,000 crore titanium project.
- Now the prolonged agitation demanding the closure of Sterlite Industries.
- Land mafia that was flourishing, losing the patronage of policymakers.
S Viswanathan is the Editor & Publisher of Industrial Economist
*Excerpted from IE