Editorial: Investments coming TN's way

CHENNAI: During a recent investors' conclave, the Tamil Nadu government announced the signing of 41 MoUs for an assured investment of over Rs 32,500 crore, which will generate about 50,000 jobs.

Often in such events, big promises are made, but only a few are realised. Unlike similar summits in other states, in the case of Tamil Nadu, the quantum of investment is not unrealistically high and therefore, the chances of them getting materialised are high. Secondly, the State has a track record of attracting substantial investments.

For instance, in the first four years of this government, over Rs 10 lakh crore investments were made through 897 MoUs, creating 32 lakh jobs.

One of the highlights of Tamil Nadu’s industrial growth story is the presence of a strong Micro, Small and Medium Enterprises (MSME) base, which depends on and services large industries.

The rise of MSMEs can be attributed to people’s entrepreneurship and risk-taking, and the government’s role in creating a supportive and enabling environment. At the above-mentioned conclave, 19 MoUs worth Rs 265.15 crore relate to MSMEs, which will yield 1,200 jobs.

One thing to be welcomed is the adoption of a decentralised growth model. In the past, industries were concentrated in Chennai and Coimbatore. However, concerted efforts, including giving attractive incentives and sops, have been made to develop industries elsewhere in the State and especially in the southern districts.

A Tidel park in Madurai and a neo Tidel park in Thoothukudi are expected to replicate the IT success achieved in Chennai. Two other major initiatives are renewable energy projects in Tirunelveli and a mega integrated textile and apparel park in Virudhunagar district, which could make it Tirupur of the south.

In the south, Thoothukudi district is being groomed to be a major industrial hub. The Tamil Nadu Space Industrial Policy 2025 has identified it as an important centre, and accordingly, a 250-acre space equipment park has been announced. Also, in the pipeline is a project which will help the district become an important ship-building hub. Similarly, the CM has inaugurated an electric vehicle assembly plant as VinFast chose the district for its first factory outside Vietnam.

Despite impressive claims by the government, there is some truth in the opposition AIADMK’s criticism regarding rising unemployment. Despite lofty goals of upskilling one crore people in the workforce towards high-value jobs, reports by NITI Aayog and Centre for Monitoring Indian Economy (CMIE) have shown that the annual unemployment rate in the state has oftentimes exceeded the national estimates. Rural unemployment, too, has been high as educated youth from rural areas are finding it difficult to get jobs.

The government has been successful in providing them with education, but relatively unsuccessful in ensuring employment.

When Tamil Nadu goes for assembly elections next year, it is not clear whether the government’s track record in industrial development and employment generation will be an important issue for the voters.

But the DMK party would not want to be seen lagging behind and therefore has been hurrying up in announcing new projects and expediting completion of projects so that they could be inaugurated and leveraged to sway the voters in its favour. The government has set the ambitious target of becoming a $1 trillion economy by 2030 and is hoping it will get the mandate to give it a shot.