Economy of Tamil Nadu
Tamil Nadu has been ranked No 1 by the Economic Freedom Rankings for the States of India [1] Possessing the fifth largest economy (2004-2005) among states in India, Tamil Nadu is also the second most industrialised state next to Maharastra.[2] It ranks second in per capita income (2004-2005) among large states. It ranks third in foreign direct investment approvals (cumulative 1991-2002) of ₹ 225,826 million ($5,000 million), next only to Maharashtra ₹ 366,024 million ($8,100 million)) and Delhi ₹ 303,038 million ($6,700 million). The State's investment constitutes 9.12% of the total FDI in the country.[3] Unlike many other states, the economic resources are quite spread out, rather than concentrated in a small industrialised area.According to the 2001 Census, Tamil Nadu has the highest level of urbanization (43.86%) in India, accounting for 6% of India’s total population and 9.6% of the urban population.[4] and is the second most industrialized state in India.[5] Tamil Nadu has a network of about 110 industrial parks and estates offering developed plots with supporting infrastructure.[6] Also, the state government is promoting other industrial parks like Rubber Park, Apparel Parks, Floriculture Park, TICEL Park for Biotechnology,[7] Siruseri IT Park, and Agro Export Zones among others. Tamil Nadu has the largest number of Small and medium enterprises (SMEs) in India.[8]
Annual Plan outlays have increased by a record 75% from ₹ 52,000 million ($1,100 million) in 2001-2 to ₹ 91,000 million ($2,000 million) in 2005-6.
Macro-economic trend
This is a chart of trend of gross state domestic product of Tamil Nadu at market prices estimated[9] by Ministry of Statistics and Programme Implementation with figures in millions of Indian Rupees.
| Year | Gross State Domestic Product |
|---|---|
| 1980 | 80,810 |
| 1985 | 156,481 |
| 1990 | 313,390 |
| 1995 | 782,050 |
| 2000 | 1,411,000 |
| 2005 | 1,945,280[10] |
The state's debt was estimated at 35 per cent of GDP in 2005.[11]
Agriculture
Tamil Nadu has historically been an agricultural state, while its advances in other fields launched the state into competition with other areas. Even so, Tamil Nadu is a leading producer of agricultural products in India. Tamil Nadu agriculture is heavily dependent on the river water and Monsoon rains. The perennial rivers are Palar, Cheyyar, Ponnaiyar, Kaveri, Meyar, Bhavani, Amaravati, Vaigai, Chittar & Tamaraparani. Non-perennial rivers include the Vellar, Noyal, Suruli, Gundar, Vaipar, Valparai and Varshali. Tamil Nadu is also the leading producer of kambu, corn, rye, ground nuts, oil, seeds and sugar cane in India.
At present Tamil Nadu is India's second biggest producer of rice. [12] Tamil Nadu is the home to Dr. M.S. Swaminathan, known as the "father of the Green Revolution" in India.[13] The town of Namakkal is also known as the Poultry hub of India.
A technological and industrial park (designated as a Special Economic Zone) was originally planned to be set up in Nanguneri, in the Tirunelveli district with an investment of ₹ 6,000 crores (US$ 1.6 billion). However, recently developmental plans point to a re-orientation of this project to Tuticorin.
Industry and manufacturing
One of the global electrical equipment public sector company BHEL has manufacturing plants at Tiruchirappalli and Ranipet. The Tamil Nadu state government owns the Tamil Nadu Newsprint and Papers (TNPL),[14] the world's biggest bagasse based Paper mills in Karur as well as the world's sixth largest manufacturer of watches together with TATA, under the brandname of "Titan".[15] 40 percent of all wind-generated electricity in India is created by windmills in Tamil Nadu. Renowned Danish wind power company NEG Micon has established its manufacturing unit in Chennai.[16] Tamil Nadu is leading producer of Cement in India,if manufacturer of power plants cethar vessels in Tiruchirappalli. It is the home for leading cement brands in the country such as Chettinad Cements(Karur), Dalmia Cements Ariyalur, Ramco cements (Madras Cement Ltd), etc., There is an ACC cement factory located in Madukarai outskirts of Coimbatore.
The region around Salem is rich in mineral ores. Country's largets steel public sector undertaking, SAIL has a special steel plant in Salem, which is ben expanded at a cost of 2000 crore rupees. Salem also has notable magnesite factories operated by private and public sectors (Public: Burn Standard & Co ; Private: Dalmia Magnesites). Tata's have their presence in the form of Tata Refractories in Salem.
Mettur, a town which is located 50 km north of Erode and west of Salem has a number of notable industries, including JSW Steels, MALCO (which has currently suspended its Aluminium production), Chemplasst, Thermal Power Plant, Hydel Power plant.
Automotive
Many heavy engineering and manufacturing-based companies are centered in and around the suburbs of Chennai (nicknamed by some, "The Detroit of Asia"). Chennai boasts the presence of global vehicle manufacturing giants like Hyundai, Ford, BMW, Mitsubishi, Komatsu, The TVS Group (TVS), Ashok Leyland, Nissan-Renault, Daimler Trucks, TI Cycles of India, TAFE Tractors, Royal Enfield, Caterpillar Inc., Caparo, Madras Rubber Factory (MRF) and Michelin as well as domestic heavyweights like MRF, TI cycles of India, Ashok Leyland, Royal Enfield, Mahindra & Mahindra, TAFE Tractors and TVS. Everything from automobiles, railway coaches, battle-tanks, tractors, motorbikes and heavy vehicles are manufactured in Tamil Nadu. Heavy Vehicles Factory in avadi was established in 1965. A large number of auto component industries are present around Coimbatore & Erode cities. Karur is known for its bus body building industries where most of the buses used in south India are manufactured. Over 11.2% of the S&P CNX 500 conglomerates have corporate offices in Tamil Nadu.
Textiles
The textile industry plays a significant role in the Indian economy by providing direct employment to an estimated 35 million people, and thereby contributing 4% of GDP and 35% of Gross Export Earnings. The textile sector contributes to 14% of the manufacturing sector. The cities of Erode & Tirupur, in Tamil Nadu are the largest garment exporters in India and sometimes referred to as Textile valley of India. In 2004, the export turnover from here was more than $1 billion. Some 7,000 garment units in the town provide employment opportunity to 1 million people. About 62% of India's textile trading takes place only in the city of Erode and 56% of India's total knitwear exports come from Tirupur. The Export Import Policy of 2002-2007 acknowledges Tirupur for its contribution to the export efforts. Coimbatore accounts for nearly $700 million and next to Coimbatore, the town of Karur & Erode generates around $300 million a year in foreign exchange through home textile exports such as bed linens, kitchen linens, toilet linens, table linens and wall hangings. Madurai and Kanchipuram is very famous for handloom sarees. This handloom sarees are on sale all over India. Tamil Nadu, Karnataka, and Kerala are the main states for wholesale sarees. This sarees manufacturing raw materials are purchased from Coimbatore, Erode and Salem. [17]
Electronics
Electronics manufacturing is a growing industry in Tamil Nadu. Chennai has emerged as EMS Hub of India. Companies like Nokia, Flextronics, Motorola, Sony-Ericsson, Foxconn, Samsung, Cisco, and Dell have chosen Chennai as their South Asian manufacturing hub. Products manufactured include circuit boards and cellular phone handsets.[18] Ericsson also has a Research and Development facility in Chennai.[19] Big EPC companies have set up their Engineering centres which include Saipem India Projects Ltd, Technip, Foster Wheeler, Mott MacDonald, Petrofac, Austrian company "Austrian Energy and Environment" have also a design office here besides local giant ECC Larsen & Toubro. Sanmina-SCI is the latest company to invest in Tamil Nadu to create a state of the art manufacturing facility[20]. Nokia Siemens Networks has decided to build a manufacturing plant for wireless network equipment in Tamil Nadu[21].
The state with a projected population of about 6.65 crore in year 2009 has high mobile penetration rate in India. According to statistics released by Telecom Regulatory Authority of India (TRAI), the state had a total subscriber base of 4.3 crore mobile customers at the beginning of August 2009.[22][23]
Fireworks
The town of Sivakasi is a leader in the areas of printing, fireworks, and safety matches. It was fondly called as Kutty Japan or "little Japan" by Jawaharlal Nehru. It contributes to 80% of India's production of safety matches as well as 90% of India's total fireworks production. Sivakasi provides over 60% of India's total offset printing solutions and ranks as one of the highest taxpaying towns in India. Sivakasi also is a 100% employed town, putting it in the company of very few towns in India.
Mining
This is a chart of proven reserves of major minerals of Tamil Nadu[24] in 2001 by Department of Geology and Mining with figures in tonnes.
| Mineral | Reserve | National Share |
|---|---|---|
| Lignite | 30,275,000 | 87% |
| Vermiculite | 2,000,000 | 66% |
| Garnet | 23,000,000 | 42% |
| Zircon | 8,000,000 | 38% |
| Graphite | 2,000,000 | 33% |
| Ilmenite | 98,000,000 | 28% |
| Rutile | 5,000,000 | 27% |
| Monazite | 2,000,000 | 25% |
| Magnesite | 73,000,000 | 17% |
Tamil Nadu has a few mining projects based on Titanium, Lignite, Magnesite, Graphite, Limestone, Granite and Bauxite[25]. The first one is the Neyveli Lignite Corporation that has led development of large industrial complex around Neyveli in Cuddalore district with Thermal power plants, Fertilizer, Brequetting and Carbonisation plants. Tata Iron and Steel Company (TISCO) have entered into MoU with Government of Tamil Nadu in June 2002 for establishing a Titannium-di-Oxide (TiO2) plant with a project outlay of $650 million. Magnesite mining is done at Salem apart from which mining of Bauxite ores are carried out at Yercaud and this region is also rich in Iron Ore [Kanjamalai]
Energy
The Tamil Nadu Energy Development Agency (TEDA) is a Tamil Nadu government promoting renewable energy sources and energy conservation activities. The agency has largely been responsible for instigating the tremendous growth of Tamil Nadu in the development of wind power.[26] Tamil Nadu is in the forefront of all other Indian states in installed capacity.[27]
The once-impoverished village of Muppandal benefited from the building of the nearby Muppandal wind farm, a renewable energy source, supplying the villagers with electricity for work.[27][28] Wind farms were built in Nagercoil making it the largest wind farm in the world,the southern most city of India which is lying between the Bay of Bengal, the Arabian Sea and the Indian Ocean. These areas generate about half of India's 2,000 megawatts of wind energy or two percent of the total power output of India.[29]
Nuclear
The Kalpakkam Nuclear Power Plant, Ennore Thermal Plant, Neyveli Lignite Power Plant, Vriddachalam Ceramics and the Narimanam Natural Gas Plants are major sources of Tamil Nadu's electricity. It is presently adding the Koodankulam Nuclear Power Plant to its energy grid. Tamil Nadu sources a significant proportion of its power needs from renewable sources with Wind Power contributing over 2000 MW or over 20% of the needs. As of 2005, Tamil Nadu is one of the few Indian states with surplus power electricity, enabling the electrical authority to sell it to neighbouring states of Andra Pradesh & Karnataka. India's leading steel producer SAIL has a steel plant in Salem, Tamil Nadu.[30] Tamil Nadu ranks first nationwide in diesel-based thermal electricity generation with national market share of over 34%.
Hydel
The Mettur Dam is a large dam in India. It was completed in 1936. The total length of the dam is 1700 meters. It is also called Stanley Reservoir. The Mettur Hydro Electrical power project is also quite large Mettur Dam. Mettur has a number of industries (50 km from Salem city): SISCOL,[31] MALCO (Madras Aluminium Company owned by Vedanta Resources), Chemplast (former known as Mettur Chemicals),[32] Thermal power plant, Hydel power plant and huge number of chemical industries. There are many other dams that provide irrigation and drinking water, including the Vaigai Dam.
Bio-diesel
Tamil Nadu at this time is the only state to have a formal Bio-Diesel Policy to use jatropha crops as a source of biofuel and to distribute wasteland to the poor farmers for the planting of these crops.[33]
Solar
In March 2008, Signet Solar Inc. [34] signed a memorandum of understanding with the State government to build a INR 20 billion thin-film silicon photovoltaic module manufacturing plant in the Sriperumbudur Special Economic Zone.[3]
In June 2008, Moser Baer inked a MoU with the state government to build INR 20 billion plant for manufacturing of silicon-based photovoltaic thin film modules and allied products in the Oragadam Special Economic Zone which is closer to the Signet Solar's plant in sriperumbudur.[35]
Transportation
Tamil Nadu has a well established transportation system that connects all parts of the state. This is partly responsible for the investment in the state. Though the present transportation system is substantial, it needs to be developed further to keep pace with the rapid increase in use.[36] Tamil Nadu is served by an extensive road network in terms of its spread and quality, providing links between urban centers, agricultural market-places and rural habitations in the countryside. There are 24 national highways in the state, covering a total distance of 2,002 km.[37] The state is also a terminus for the Golden Quadrilateral project that is 99.2% completed as of July 31st 2010 [38]. The state has a total road length of 167,000 km, of which 60,628 km are maintained by Highways Department. This is nearly 2.5 times higher than the density of all-India road network.[39] It is currently working on upgrading its road network, though the pace of work is considered slow.[40]
Tamil Nadu has a well developed rail network as part of Southern Railway. Headquartered at Chennai, the present Southern Railway network extends over a large area of India's Southern Peninsula, covering the states of Tamil Nadu, Kerala, Pondicherry, a major portion of Karnataka and a small portion of Andhra Pradesh. Tamil Nadu has a total railway track length of 6,693 km and there are 690 railway stations in the state. The system connects it with most major cities in India. Main rail junctions in the state include Chennai, Coimbatore, Erode, Madurai, Salem and Tiruchirapalli. Chennai has a well-established Suburban Railway network and is in the process of developing a metro.
Tamil Nadu has a major international airport, Chennai International Airport, that is connected with 19 countries with more than 329 direct flights every day. This is currently the third largest airport in India after Mumbai and Delhi and has a passenger growth of 18%. It also has domestic airports at Coimbatore, Trichy, Tuticorin, Salem and Madurai make several parts of the state easily accessible. Increased industrial activity has given rise to an increase in passenger traffic as well as freight movement which has been growing at over 18 per cent per year.[41]
Tamil Nadu has three major ports at Chennai, Ennore and Tuticorin, as well as one intermediate port, Nagapattinam, and seven minor ports, Rameswaram, Kanyakumari, Cuddalore, Colachel, Karaikal, Pamban and Valinokkan of which are currently capable of handling over 73 million metric tonnes of cargo annually (24 per cent share of India). All the minor ports are managed by the Tamil Nadu Maritime Board.[42] Chennai Port is an artificial harbour situated on the Coromandel Coast in South-East India and it is the second principal port in the country for handling containers. It is currently being upgraded to have a dedicated terminal for cars capable of handling 400,000 vehicles by 2009 to be used by Hyundai, Ford and Nissan Renault[43]. Ennore Port was recently converted from an intermediate port to a major port and handles all the coal and ore traffic in Tamil Nadu. The volume of cargo in the ports grew by 13 per cent over 2005.[44][45] The Tuticorin Port is expanding its facilities at the cost of US $1.6 billion[46]. The Sethusamudram Shipping Canal Project will transform the Tuticorin port into a transshipment hub similar to those in Singapore and Colombo. The ports are in need of improvement and some of them have container terminals privatized.
Services
Tamil Nadu has over 250 engineering colleges, the most of any state in India.
This is a chart of trend of software exports from Tamil Nadu published by ELCOT (Electronics Corporation of Tamil Nadu Ltd.) with figures in millions of Indian Rupees.[47]
| Year | Software Exports | Software Companies |
|---|---|---|
| 1995 | 370 | 34 |
| 2000 | 31,160 | 766 |
| 2005 | 141,150 | 1,427 |
| 2007-2008 | 284,900Source | - |
Chennai is the second largest software exporter in India, next to Bangalore. India's largest IT park is housed at Chennai. Software exports from Tamil Nadu during 2008-09 rose 29 per cent to touch 
36,680 crore, involving a workforce of 2.8 lakh.[48] Chennai is a hub for e-publishing, as there are 47 e-publishing units registered with the STPI in Chennai and 25 in Bangalore. Companies such as HCL, Wipro, TCS, Satyam, Infosys, Cognizant Technology Solutions, Covansys, Ford Information Technology, Xansa, Verizon, iSoft, iNautix, Electronic Data Systems, Bally and many others have offices in Chennai. Infosys Technologies has set up India's largest software development centre to house 25,000 software professionals at an estimated investment of 12,500 million ($270 million) in Chennai.[49] India's largest IT park is housed at Chennai, jointly made by Ascendas India Ltd, a Singapore-based company engaged in providing business space solutions, and Tamil Nadu Industrial Development Corporation (TIDCO).[50]
Business Process Outsourcing Services:
Chennai is now emerging as the most preferred destination for high-end BPOs in financial services, healthcare and other back-office services for multinational companies. Companies like Ajuba Solutions (Global provider of healthcare revenue cycle outsourcing services), Congruent Solutions (back-end services for California-based retirement funds), Secova eServices (HR service provider for US clients), Firstsource (Business Process Management for BFSI, Healthcare, Telecom and Publishing clients), Lason India (data processing for healthcare and financial services clients in the US) and OfficeTiger (outsourcing of creative works) have set up centres here to take advantage of Chennai's "quality talent pool and infrastructure". Stanchart, eServe (Citibank), ABN AMRO and World Bank have also chosen the city for their back-office functions.[51] Tamil Nadu also has a number of rural BPO companies like Desicrew Solutions
In the recent surveys, Chennai has been rated as the most attractive city for Offshoring Services.[52]
Knowledge Process Outsourcing:
Chennai is also the preferred destination for companies outsourcing their high-end knowledge intensive operations. Testimony to this is the presence of major market research companies such as Frost & Sullivan and equity research companies such as Irevna in Chennai. This is the next high growth area that Chennai is witnessing.
Revenues of Government
Tamil Nadu ranks second nationwide of all State governments in tax revenue. (See: States of India by tax revenues.) This is a chart of trend of tax revenues (including the shares from Union tax pool) extracted from the Consolidated Fund of the Government of Tamil Nadu[53] with figures in millions of Indian Rupees. See also the Finance Commission of India report.[54] Tax revenues of local bodies are excluded.
| Year | Tax Revenues | Sales Tax | Excise Duties | Registration Fees | Corporation Tax | Vehicle Tax |
|---|---|---|---|---|---|---|
| 1950 | 441[55] | |||||
| 1955 | 270 | 112[56] | 3 | 7 | ||
| 1960 | 417 | 191 | ||||
| 1965 | 723 | 409 | 4 | 99[57] | 133 | |
| 1970 | ||||||
| 1975 | 3,190 | |||||
| 1980 | ||||||
| 1985 | ||||||
| 1990 | 34,508 | 20,659 | 4,348 | 2,263 | 2,273 | |
| 1995 | 79,045 | 46,892 | 9,346 | 6,130 | 3,922 | |
| 2000 | 150,659 | 81,971 | 18,686 | 9,101 | 5,904 | |
| 2005 | 253,232 | 143,607[58] | 24,780 | 15,628[57] | 13,846 | 11,305 |
This is a chart of trend of non-tax revenues and grants-in-aid extracted from the Consolidated Fund of the Government of Tamil Nadu with figures in millions of Indian Rupees. See also [4] and [5]. Non-tax revenues of local bodies are excluded.
| Year | Non-tax Revenues | Interest | Mining | Grants-in-Aid |
|---|---|---|---|---|
| 1960 | 197 | 114 | ||
| 1965 | 466 | 233 | ||
| 1970 | ||||
| 1975 | ||||
| 1980 | ||||
| 1985 | ||||
| 1990 | 3,814 | 897 | 588 | 12,555 |
| 1995 | 8,584 | 3,428 | 672 | 18,362 |
| 2000 | 17,107 | 4,036 | 3,953 | 15,398 |
| 2005 | 21,014 | 5,673 | 4,274[56] | 28,268 |
Debt of Government
Amount in Crores
| Fin Year | Bought | Repaid | Total Debt |
|---|---|---|---|
| March 31, 2000 | 23,840 [6] | ||
| March 31, 2001 | 28,685 | ||
| March 31, 2006 | 57,457 | ||
| March 31, 2007 | 60,170 | ||
| March 31, 2008 | 64,655 | ||
| March 31, 2009 | 74,858 [7] | ||
| March 31, 2010 |
See also
Notes
- ^ http://www.expressindia.com/latest-news/TN-still-most-economically-free/693125/
- ^ Ranking of states
- ^ Tamil Nadu ranks third in FDI, favoured destination
- ^ "e-CENSUSIndia". CensusIndia.net. Retrieved 2006-08-16.
- ^ World Bank Supports India's Urban Development
- ^ Example include Tidelpark and ITP Chennai
- ^ TICEL Park for Biotechnology
- ^ [1]
- ^ "National Accounts Division : Press release & Statements". Government of India. Retrieved 2006-08-16.
- ^ Tamil Nadu economy soars to $44b by 2005
- ^ Tamil Nadu debt estimated at 35 per cent of GDP
- ^ Government Policy Notes
- ^ M. S. Swaminathan Research Foundation
- ^ TNPL
- ^ [2]
- ^ Vestas Webpage
- ^ Tirupur:India's Textile Valley
- ^ Flextronics signs pact for Chennai facility
- ^ Ericsson India Private Ltd
- ^ Sanmina sets up manufacturing plant in Tamil Nadu
- ^ Nokia Siemens to invest in Tamil Nadu
- ^ "TN gears up for mobile turf war". Times of India. 18 June 2009.
- ^ "1 in 2 persons in TN has a cellphone, State At Present Has 4Cr Mobile Subscribers, Second Only To Maharashtra" (Chennai ed.). 10 August 2009. p. 3.
- ^ "An overview of Mineral Reserves". Government of Tamil Nada. Retrieved 2006-08-16.
- ^ Tamil Nadu Mining
- ^ "TEDA catalyses renewable energy sector growth in Tamil Nadu". Retrieved 2006-10-28.
- ^ a b "Tapping the Wind - India". 2005. Retrieved 2006-10-28.
{{cite web}}: Unknown parameter|month=ignored (help) - ^ Watts, Himangshu (2003). "Clean Energy Brings Windfall to Indian Village". Reuters News Service. Retrieved 2006-10-28.
{{cite web}}: Unknown parameter|month=ignored (help) - ^ "Wind power boosts Southern Indian economy". Aljazeera.net. 2003. Retrieved 2006-10-28.
{{cite web}}: Unknown parameter|month=ignored (help) - ^ SAIL Plant
- ^ Southern Iron and Steel Company
- ^ Chemplast Sanmar Ltd
- ^ "Clean Green Energy from Tamil Nadu, India". Retrieved 2006-11-15.
- ^ http://www.signetsolar.com
- ^ http://www.hindu.com/2008/06/10/stories/2008061053460400.htm
- ^ Tamil Nadu Infrastructure Development
- ^ Economy and Business in Tamil Nadu
- ^ National Highway Authority of India
- ^ Official site for Tamil Nadu Highways
- ^ Highways, roads to be upgraded in Tamil Nadu
- ^ Transportation in Tamil Nadu
- ^ Creation of the Tamil Nadu Maritime Board
- ^ Dedicated Ports in Chennai
- ^ Official website for Ennore Port
- ^ Official website for Tuticorin Port
- ^ Expansion of Tuticorin Port
- ^ "Status of IT industry in Tamil Nadu". ELCOT. Retrieved 2006-08-16.
- ^ Rise in software exports, says Stalin
- ^ Infosys setting up giant centre in Chennai
- ^ India's largest IT park at Chennai to have world-class workplace facilities
- ^ Chennai becomes most preferred BPO hub
- ^ Chennai most attractive city for offshoring services
- ^ "Tax Revenue Receipts" (PDF). Tamil Nadu Government. Archived from the original (PDF) on 2006-07-24. Retrieved 2006-08-16.
- ^ "Finance Commission Report". Finance Commission of India. Retrieved 2006-08-16. [dead link]
- ^ includes the province of Hyderabad
- ^ a b includes revenues from non-ferrous mining and metallurgical industries
- ^ a b includes stamp fees
- ^ includes tax on trades