Tamil Nadu needs to evolve sector-specific strategies to address the concerns of each sector and work on further improving the ease of doing business. Sectors growing at a lesser rate require special policy initiatives for their revitalisation. The emphasis ought to be on diversification into more value-added activities with innovation on the one hand, and expanding mass employment-generating sectors on the other, said the Economic Survey of Tamil Nadu 2024-25 released by the State Planning Commission on Thursday.
The State government’s initiatives in the area of skilling have yielded promising results. However, these efforts need to be scaled up further to increase workforce participation and increase labour productivity.
Industrialisation of backward regions needs to be intensified further, especially in the southern districts. The government needs to invest substantially in creating large-scale land banks for attracting investors in these areas. To rapidly increase industrialisation of the State, innovative business models such as plug-and-play facilities can be encouraged. Industrial townships can be established in suitable location across the State to attract global investors, the document said.
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Industrial growth
Tamil Nadu is already in the forefront of industrial growth in the country. These gains need to be consolidated and built upon to make the growth story sustainable in the long run. This is especially crucial given the ageing population of the State and the urgency to capture the demographic dividend in the next 20 years, the survey said.
On the growth of industry and its components, the survey said that from 2019-20 to 2023-24 (based on constant prices), the industrial sector in the State grew at an average of 6 per cent compared with the national growth rate of 4.74 per cent. Over the last three years, the State’s industrial sector achieved an average growth rate of 8.78 per cent, compared with an all-India industry growth rate of 7.95 per cent. Within this period, manufacturing grew at an average of 8.33 per cent and construction grew at 9.03 per cent, the survey said.
The industrial sector encompasses manufacturing, construction, mining, quarrying, electricity and water supply. In 2023-24, the industry GSVA (gross State value added) at nominal prices in the State was about ₹8.39 lakh crore. This contributed 33.68 per cent to the total GSVA of Tamil Nadu and accounted for 11.34 per cent of India’s total industrial gross value added (GVA). Of this, manufacturing contributed ₹4.63 lakh crore, while construction contributed ₹3.12 lakh crore. Between 2021-22 and 2023-24, the manufacturing sector grew at 8.33 per cent, while the construction sector grew at 9.03 per cent, the survey said.
