Event ReportsPublished on Nov 15, 2019
Tamil Nadu slipping in investment-destination, says expert
“Growth in and of Tamil Nadu should be compared with that of some European countries, and not with those of other Indian States,” according to Sushila Ravindranath, Consultant Editor, New Indian Express. Initiating an interaction on “Economy & development: The way forward for Tamil Nadu” at Observer Research Foundation, Chennai, on 12 October 2019, Sushila Ravindranath presented an analytical view of the current economic status of Tamil Nadu. Backed with statistics and data, Sushila Ravindranath said that Tamil Nadu has been the most favourable State for investment. After the exit of charismatic political leader like then chief minister Jayalalithaa and her predecessor M Karunanidhi, who ensured growth under the radar, there was an administrative standstill of sorts, leading to a situation where Tamil Nadu was projected as ‘protest capital’ of the country. As per the figures collated by Department of Industrial Policy and Promotion (DIPP), Tamil Nadu as an investment-destination was fading. It has not been listed as among the top 10 investment-destination States, in the interim. The National Council of Applied Economic Research (NCAER) has also measured that Tamil Nadu has fallen in ‘State Investment Potential Index’ (SIPI), which ranks States based on five pillars, namely, land and labour, infrastructure, economic climate, governance and political stability, and business perception. Sushila Ravindranath Sushila attributed it to political instability post-Jayalalithaa, and lack of ease-of-doing business. Despite the figures, Tamil Nadu ranks second when it comes to employment- generation in the organised sector. The speaker explained the dichotomy, if any, to the fact that core entrepreneurship taking care of the situation. She narrated the example of the ‘Summer of 2019’, when across-the-State, there was a massive water crisis. As she pointed out, despite the situation threatening to go out of control, the bottled and canned water business ensured that things remained under control. In this context, Sushila Ravindranath pointed out how all along the State has kept growth figures below the radar, and how there were no proper measures to tap to the parameters of growth from official sources. This, however, does not mean that the nation could not understand the economics and politics of the State, she said, adding that “Tamil Nadu is very much an under-researched State”. Speaking about the automobile sector, Chennai, which is known as the ‘Detroit of India’, has been affected because of the global trends. The key to electric vehicles lies in research and development of battery technologies. The jobs lost in automobile industry were also contract jobs, which have not been taken in to account, as the person who loses one contract job picks up another, whether in the same sector or another, she said.

Windows of opportunity

Speaking on education, Sushila Ravindranath said that Tamil Nadu, with a very high literacy rate and a youthful generation being high on aspirations, do not seem to be landing in desired jobs. On the other hand, the youth, after their graduation and hunting for jobs, create their own windows of opportunity in the local, unorganised sectors, though not with a high international standard. They have understood that their high aspirations were not realistic, because of the substandard engineering colleges. Higher education is thus an area for the authorities at all levels to address, she averred. Having an exponential growth of technology causes the need for up-skilling and re-skilling labour, and the government should ensure that education will enhance the skills to the latest requirement. Institutes like IIT-Madras are working with students exclusively for start-ups in their Research Park, which has incubated at least 200 start-ups. This has proved to be inspirational to other IITs and NITs in the country, where students are a step closer to ground breaking entrepreneurship. On the healthcare sector, Sushila Ravindranath said that the State is well developed and will continue to develop. In terms of standards and hygiene, the State is always in the ‘pink of health’.


Given the gravity of the GDP-centric development in the country and the kind of adoption of Tamil Nadu schemes in education, healthcare and entrepreneurship that other States and also the Centre have adopted, the growth of Tamil Nadu has to be compared with those of some European countries, and not with other Indian States, Sushila Ravindranath said. Data, especially when it comes to Tamil Nadu economy, is very much divergent, hence have to be taken with pinch of salt. It is the culture of people to keep their profile low, and hence the world certainly has not known the true potential of the State. Provided corruption is reduced and government ensures re-skilling, the momentum of growth in the State will be even more, concluded Sushila Ravindranath.
This report was written by S Sivanesan, Research Associate, Observer Research Foundation, Chennai
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