Chief Minister Edappadi K Palaniswami's recent visit to the US to bring in estimated investments to the tune of Rs 8,830 crore has set off a heated debate amongst political circles, with the DMK criticising the CM on his trip, asking if one needs to go to the US to bring in investments into the State. The argument from the DMK was that Kalaignar Karunanidhi without going out of the country brought in maximum investment, including the TIDEL Park, and gave a major push to the automobile sector. While it appears investments flowed in a particular regime, approvals for it may have come in an earlier regime.
Tamil Nadu, the second largest economy in India with its largest urbanised population, has a dynamic industrialised culture since the Kamaraj era. Chennai is the hub of the automotive industry in India with a contribution of over 25 per cent. In sectors like aerospace and defence, textile, garments, machinery, electronics, leather, and biotechnology the southern State is a leading player or has a strong presence. In the information technology sector, Tamil Nadu is the second largest exporter with an export revenue of $20 billion (Rs 1.40 lakh crore) in 2018.
The competition has got tough among the States to attract investments. Over the last one decade, southern States like Karnataka and Andhra Pradesh and the new entrant in the fray, Telangana, are catching up and attracting huge investments in their respective States. Some quarters raise a question on whether Tamil Nadu has lost its dynamics to attract investments after the death of two of its illustrious Chief Ministers-M Karunanidhi and J Jayalalithaa-who worked overtime to attract investments in the post liberalised economy.
The National Council of Applied Economic Research (NCAER) has ranked Tamil Nadu as the most attractive State for investors, after Delhi in its State Investment Potential Index-2018. The yearly index is published by assessing competitiveness of Indian States on six key categories – land, labour, infrastructure, economic climate, political stability and governance, and business perceptions. In labour and good governance, Tamil Nadu ranks number one. It clearly shows that the State remains amongst the top in attracting investments.
On the Foreign Direct Investment (FDI) front, the Department for Promotion of Industry and Internal Trade (DPIIT) data suggests total FDI inflows into Tamil Nadu and Puducherry during 2011-2018 was $29.75 billion. A top official from the Industries department said, “The policy continuity has been ensured in Tamil Nadu. Whoever is in power continues to honour the MoUs and the commitments of the previous governments.” In addition, quality infrastructure spread across the State along with the talented human resources fuelled the growth.
Apart from home grown automobile companies like Ashok Leyland, TVS Motors, TAFE, Royal Enfield, the State now has the presence of global auto giants like Ford, Mitsubishi, Daimler, Nissan, Hyundai, Renault and BMW, with an annual installed capacity of 1.71 million car units attained over 20 years.
The Centre has set up a National Automotive Testing and R&D Infrastructure Project (NATRiP) at Oragadam near Chennai at a cost of Rs 450 crore. The project helped to bring in global standards of automotive safety, emission and performance in India and the seamless integration of the Indian automotive industry with the global industry. The investment in the automobile sector was not restricted to one regime. It has been progressively in the upward direction regime after regime, whether it was Karunanidhi or Jayalalithaa, and now continues in the present government. This, experts attribute to the consistency and continuous improvement in the industrial ecosystem and both the leaders encouraging it.
Building a frame of STEEL for a vibrant industry through different eras
A true nationalist known for his integrity and simplicity, he laid the foundation for the State’s industrial growth. He was instrumental in spreading a vibrant educational system and agriculture growth initiative in his nine-year rule (1954-63) as Chief Minister of Tamil Nadu. Central public sector units like Integral Coach Factory, BHEL, Tiruchy, Neyveli Lignite Corporation (now known as NLC India Ltd,) Hindustan Teleprinter and Hindustan Film Workshop-all came up in his tenure
1948 Similarly, in the private sector, a slew of large companies like Ashok Leyland, TI Cycles, Simpsons, TVS Lucas, India Pistons all sprang up or blossomed during his regime. With R Venkataraman as Labour Minister and C Subramaniam as Finance Minister and T T Krishnamachari as Union Finance Minister, a lot of support came for the auto and auto component industry which was already active with TVS, the Ashok Group and Simpsons. In 1951, the State had 71 textile plants. that went up to 134 in 1961. Sugar, cement and paper industries flourished under Kamaraj’s rule. To promote small and medium industries, he set up the Guindy Industrial Estate, followed by Virudhunagar. He also initiated plans for setting up nine more industrial zones in different parts of the State. That absorbed a large number of skilled, semi-skilled and unskilled workers and laid out a strong industrial base for the southern State
1959 Introducing free education along with free meal programme, his tenure witnessed primary school education spreading across the State. High schools trebled to 1,995 from 637 and overall students attending schools reached 40 lakh from 19 lakh. Kamaraj, a school dropout, was instrumental in the establishment of IIT Madras in 1959. The Congress stalwart put the backbone of the State’s educational system and industrialisation process
C N Annadurai
Playing the anti-Hindi card and presently the glory of Dravidian and Tamil heritage, Conjeevaram Natarajan Annadurai, fondly known as Anna (elder brother), defeated the nationalist Congress party and became the first non-Congress Chief Minister of Tamil Nadu in 1967
He introduced the subsidised rice scheme for Re 1 (the scheme was later withdrawn) and continued the stride of industrialisation in his short reign. Salem Steel Plant and Neyveli Lignite Corporation commenced operations during his time
1967 During his tenure, he allotted funds for five major power plants to meet the power deficiency in the State. One interesting fact was that during 1967, Tamil Nadu was producing 843 MW of power, but the demand was 1,370 MW which was met by buying power from Karnataka
A slew of cement plants and a fertilizer factory came up during the period
Anna backed educationists and was easily approachable for the people. He would resolve their problems then and there. He had a great vision for the State. He respected the intellects. A post-graduate himself and a great script writer, he knew the value of creating an industrial ecosystem for the development of the State
The five-time Chief Minister between 1969 and 2011 brought in the maximum investments into the State across regimes. He took many bold steps not only to bring welfare schemes, but also in setting up IT parks and channelising large investments to the automotive sector and identifying other investment avenues, leading to huge employment opportunities
2000 Tamil Nadu was one of the first States to come out with a comprehensive IT policy in 1997 to attract investment in the thriving information technology sector. Chennai-based TIDEL Park, a 1.28-million sq ft information technology (IT) park promoted by state-owned companies TIDCO and ELCOT, unleashed information technology revolution in the State. Set up in 2000 during Karunanidhi’s regime, the IT park is one of the largest IT infrastructure in Asia and accommodates about 27 IT companies. This initiative attracted many Indian and global majors to set shop in Chennai. The State has an International Tech Park (Ascendas) in Chennai and another large one in Mahindra World City. Tamil Nadu has around three lakh people working in IT/ITES industry that exports $20 billion (Rs 1.40 lakh crore) worth IT products and services
TIDEL Park has also extended its presence to Avadi and Coimbatore. Over 1,000 software companies including biggies TCS, Infosys, Cognizant, HCL, Tech Mahindra and Wipro are operating in the State. Most IT giants like IBM, Accenture, Sopra, CGI Inc, DXC Technology have their offices in Chennai. Infosys has set up India’s largest software development centre to house around 25,000 software professionals
Coimbatore is fast emerging as the second largest software development centre in the State, with presence of Amazon, Bosch, Cognizant, TCS, Wipro, HCL, Polaris, etc. to name a few
Tamil Nadu has 36 functional special economic zones (SEZs), the largest in the country. India has 204 SEZs. SEZs are export hubs and it contributes to about 25 per cent of India’s exports
2006 Automobile major Ford and mobile and network major Nokia also invested in the State during his tenure
Saint Gobain, a French multinational set up a huge glass and glass solution manufacturing facility. Started with Rs 500 crore, its total investment in TN alone is Rs 3,400 crore
M G Ramachandran
The actor-turned-politician, popularly known as MGR, ruled the State for 10 years between 1977 and 1987. The mass leader’s main achievement was the reintroduction of the popular mid-day meal scheme across all government and aided schools
MGR ensured that all the industries that started were given good support. He concentrated largely on welfare measures, thinking of the upliftment of the poor all the time. His stamp for the cause of the poor is still remembered fondly by the people
1984 It was during MGR’s period when several self-financing educational institutions were given permission to start engineering and medical colleges in the State. This led to several engineering colleges to be set up in the 1980s, and today, the State has over 500 engineering colleges, almost on a par with Karnataka. Among the leading engineering colleges were VIT, Vellore (1984), SRM, Sathyabama engineering college that came up, helping students in turn to flourish and even find their way to the US for higher education and jobs. In those days, only Karnataka had a large number of engineering colleges
It was also during MGR’s period that NRI investments were encouraged largely
Tourism industry flourished during his regime as MGR envisioned developing the heritage and temple sites of the State. MGR maintained good law and order, thus helping a positive industrial climate to flourish
The initial investment of Korean chaebol Hyundai started in J Jayalalithaa’s regime. The Korean giant had invested $ 2.7 billion in the State and operated two plants near Chennai. An additional investment came through their vendor partners, who have pumped in $1.2 billion so far. It employs close to 10,000 people. Hyundai has now signed an MoU with the State government to invest another Rs 70,000 crore to expand its production capacity. This is expected to generate an additional 700 direct jobs
2015 In its first edition of the Global Investors Meet (GIM) in 2015 (Jayalalithaa’s regime), the State had signed 98 Memoranda of Understanding (MoUs) and agreements anticipating an investment of Rs 3 lakh crore
Jayalalithaa introduced the free laptop scheme catering to students and initially distributed 11 lakh laptops. The laptops were distributed at no cost
2013 Focusing on the welfare of the people, she came out with a slew of products under the brand name ‘Amma’ that were distributed at affordable prices. They include Amma kudineeer at Rs 10, Amma salt, Amma cement, Amma baby kit for mother and child. Amma pharmacies sold essential medicine almost 35 per cent lesser than MRP
(Illustrations: Varghese Kallada)
News Research Department