Tamil Nadu must develop targeted strategies for each sector to tackle specific challenges and enhance the overall ease of doing business. Sectors that are experiencing slower growth require tailored policy measures to rejuvenate them. The focus should be on diversifying into higher value-added activities through innovation, while also expanding sectors that generate mass employment, as highlighted in the Economic Survey of Tamil Nadu for 2024-25, released by the State Planning Commission.
The government’s initiatives in skill development have shown encouraging results, but these efforts need to be intensified to boost workforce participation and enhance labor productivity.
There is a pressing need to accelerate industrial development in underdeveloped regions, particularly in the southern districts of the state. The government should make significant investments in creating expansive land banks to attract investors to these areas. To expedite the industrialization process in Tamil Nadu, innovative business models, such as plug-and-play facilities, should be promoted. Establishing industrial townships in strategically located areas across the state can also draw in global investors, according to the survey.
Tamil Nadu is already a leader in industrial growth nationwide. It is essential to solidify these achievements and build on them to ensure sustainable growth in the long term. This is especially vital considering the state’s aging population and the need to leverage the demographic dividend over the next two decades.
Regarding the growth of the industrial sector, the survey indicates that from 2019-20 to 2023-24 (based on constant prices), Tamil Nadu’s industrial sector experienced an average growth rate of 6%, outpacing the national average of 4.74%. Over the past three years, the state’s industrial sector achieved an average growth rate of 8.78%, compared to an all-India industrial growth rate of 7.95%. During this time, the manufacturing sector grew by an average of 8.33%, while the construction sector recorded a growth rate of 9.03%.
The industrial sector encompasses manufacturing, construction, mining, quarrying, electricity, and water supply. In 2023-24, the nominal Gross State Value Added (GSVA) from the industrial sector in Tamil Nadu was approximately ₹8.39 lakh crore, contributing 33.68% to the state’s total GSVA and accounting for 11.34% of India’s total industrial Gross Value Added (GVA). Within this, manufacturing accounted for ₹4.63 lakh crore and construction for ₹3.12 lakh crore. Over the period from 2021-22 to 2023-24, the manufacturing sector grew at 8.33%, while the construction sector grew at 9.03%.
