Targeting trillion dollar dream

CHENNAI: The TN government’s efforts to tie up a string of investors and hard-sell the single window system fructified earlier this month following the signing of as many as 60 MoUs at an Investors’ Conclave. The cumulative investment resultant from this drive is pegged at Rs 1.25 lakh crore with a potential of creating 75,000 new jobs across the State. The range of investments is diverse, covering green tech, engineering, emerging technologies such as drones, electric vehicles, semiconductors and renewable energy.

A lithium ion cell facility is to come up at Tiruvallur while a green ammonia project at Thoothukudi is being set up as well; Other key projects include a 5G networking facility at Pollachi, a toy-making facility at Hosur, a power plant at Gangaikondan, an aero engine component unit at Hosur and a tile production centre at Thanjavur. A sizeable chunk of the investments has gone to Thoothukudi, reinforcing the State’s attempts to bring lesser developed districts into the limelight.

One of the broad-based objectives of the Conclave could be to replicate the success of the textile and leather clusters in Coimbatore, Tirupur and Chennai, in other regions of TN. The creation of a furniture park and new fintech hubs is a case in point. Since the DMK took charge in 2021, MoUs worth Rs 2.2 lakh crore have been signed in the State.

In June 2021, TN announced the formation of a first of its kind economic advisory council. RBI former governor Raghuram Rajan, Nobel laureate Esther Duflo, former CEA Arvind Subramanian, development economist Jean Dreze and former Finance Secretary S Narayan, were part of this panel created to help the State achieve the economic vision of a $1 trillion economy by 2030. The council’s mandate is to ensure that the benefits of economic growth percolate to all segments of the society.

And there’s reason to be optimistic about achieving this vision. Tamil Nadu is the second-largest economy in India with a GSDP of Rs 300 bn and has been known as India’s automobile and electronics hub for decades. Its connectivity, infrastructure, talent pool, manufacturing prowess and a Guidance Bureau that has gotten a makeover, are keeping TN ahead in the investment race. The State’s ranking in Ease of Doing Business has moved up to 3 this year from 14 in 2020. It has also shot up six spots to 11 in the national ranking of the start-up ecosystem.

There are challenges aplenty too, as Karnataka, Telangana and Andhra Pradesh have been on an overdrive to pitch themselves as investment hotspots, employing social media to woo investors. That’s something that seems to be lacking in TN, thanks to its modest approach in promoting itself. Also, Chennai houses just three of the 115 unicorns in India, despite having the technology and talent. The pandemic and the exit of companies such as Ford and the shutdown of Vedanta’s Sterlite have also taken its toll on the employment front.

It is time TN focusses on export-oriented, labour intensive sectors (apparel, footwear, automobiles) so that it can leverage its historical advantages. The State’s economic think tank has a tall order in terms of evaluating methods to recoup revenue, as deficits and borrowings remain pain points. Revision of property tax rates in Corporations is being seen as a means to increase the tax mop-up. Also, tourism and hospitality are sectors that can be milked generously, as TN is one of the most visited and transited destinations nationally. The vision of the trillion dollar economy will not remain a pipe dream, provided political will, conducive policy and the creation of a business milieu that encourages risk taking, work in tandem.