Tamil Nadu - Economy
Tamil Nadu is the fourth largest state of India. It has a diversified manufacturing sector and features among the leading states in several industries like automobiles, components, engineering, pharmaceuticals, garments, textile products, leather products, chemicals, plastics, etc. It ranks first among the states in terms of number of factories and industrial workers. Tamil Nadu’s per capita income was below the national a verage during the 1980s but crossed the all-India average marginally in 1991–2. Ever since the early 1990s this higher per capita income has been maintained.
Agriculture is the major occupation in Tamilnadu. The total cultivated area in the State was 56.10 million hectares in 2007-08. The principal food crops include paddy, millets and pulses. Commercial crops include sugarcane, cotton, sunflower, coconut, cashew, chillies, gingelly and groundnut. Plantation crops are tea, coffee, cardamom and rubber. Major forest produces are timber, sandalwood, pulp wood and fuel wood. Tamilnadu occupies a premier position in the production and extensive application of bio-fertilizers. Efforts are on to improve farming technologies so as to increase yields in the low rainfall areas of the State. Annual food grains production in the year 2007-08 was 100.35 lakh mt.
Agriculture has been the mainstay of the State economy since independence with more than 65 per cent of the population depending on this sector for a living. There are strong links between agriculture and economic growth. Agriculture spurs demand for inputs such as fertilizers, pesticides and machinery, and on the supply side it provides raw material for agro-based industries such as cotton textiles, sugar and vegetable oils. With increase in incomes, the increase in expenditure of rural households results in a higher demand for consumer goods including clothing, sugar and edible oils. However, in the process of development, the share of agriculture in the net State domestic product (NSDP) gradually declined due to higher productivity and production in the non-agricultural sectors.
Tamil Nadu is among the most industrialized States in India today. The State ranks next to Maharashtra in terms of the contribution of the manufacturing sector to NSDP. Major Industries in the State are cotton, heavy commercial vehicles, auto components, railway coaches, power pumps, leather tanning industries, cement, sugar, paper, automobiles and safety matches.
Knowledge based industries like I.T. and Biotechnology have become the thrust area in the industrial scene in Tamilnadu. TIDEL, a software technology park, has been established in Tharamani, Chennai. The Software export from the State which was Rs. 20,700 crores in 2006-07 is expected to cross Rs. 25,000 crores in 2007-08. Top I.T. and Telecom companies such as Nokia, Motorola, Foxcon, Flextronic and Dell have commenced production. Global auto majors Hyundai Motors, Ford, Hindustan Motors and Mitsubishi have commenced production plants. Ashok Leyland and TAFE have set up expansion plants in Chennai.
Main mineral wealth of the state is granite, lignite and limestone. The state is an important exporter of tanned skin and leather goods, yarn, tea, coffee, spices, engineering goods, tobacco, handicrafts and black granite. Tamil Nadu contributes to 60 percent of the tannery industry in India.
Important irrigation schemes and modernisation of existing Periyar Vaigai System, Palar Basin System and Parambikulam-Aliyar System besides the minor system in Vellar, Pennayar, Araniyar Amaravathi, Chithar basins totaling, an extent of six lakh acres of existing ayacut in Tamil Nadu have been benefited by implementing the 'System Improvement and Farmers Turnover Projects' executed with assistance from World Bank. The major irrigation system covering one-third of irrigated extent in Tamil Nadu, namely tank irrigation system has been given due regard for development under WRCP, and 620 tanks maintained by Public Works Department falling under Palar, Vaigai, and Tamaraparani Basins have been taken up for rehabilitation and improvement. The State has become the pioneer State to implement the system of 'River basin management' by an individual body consisting of officials and farmers besides various representatives of the basin. To start with, Basin Management Boards have been formed for Palar and Tamaraparani basins.
Tamil Nadu Industrial Development Corporation Ltd (TIDCO), State Industries Promotion Corporation of Tamil Nadu (SIPCOT), Tamil Nadu Industrial Investment Corporation Limited (TIIC), and Tamil Nadu Small Industries Development Corporation Limited (TANSIDCO) are jointly developing industrial infrastructure in the state.
Between 2011-12 and 2018-19, Gross State Domestic Product (GSDP) expanded at a Compound Annual Growth Rate (CAGR) of 11.46 per cent to Rs 16.06 trillion (US$ 222.58 billion) whereas the Net State Domestic Product (NSDP) expanded at a CAGR of 11.45 per cent to Rs 14.41 trillion (US$ 199.69 billion). As of November 2019, the state had a total installed power generation capacity of 31.92 GW.
According to the DPIIT, cumulative FDI inflows in Tamil Nadu during April 2000 to September 2019 amounted to US$ 31.19 billion. Total merchandise exports from the state stood at US$ 30.52 billion during 2017-18. During April-September 2019, exports stood at US$ 15.33 billion. As of March 2019. IT & ITeS exports from Tamil Nadu have increased to Rs 1.39 lakh crore (US$ 19.9 billion) in 2018-19, at a growth rate of 10 per cent year-on-year.
As of November 2019, the state had 54 formally approved SEZs, 50 notified SEZs and four with in- principle approval SEZs and has total 40 exporting SEZs. Tamil Nadu Industrial Guidance & Export Promotion Bureau has been set up with the objective of attracting major investment proposals into Tamil Nadu.
The major challenges of the agriculture sector in the State are related to the issue that 57 percent of the area falls under dry land agriculture and there is high dependency on rainfall for irrigation. Inadequate, untimely and polluted irrigation water source cripples production and productivity of crops. Low soil fertility, low level of farm mechanization due to small land holdings, monsoon vagaries and at present, the climate changes have compounded the problem further. With exhausted nutrients and microbes, depleted organic carbon status and humus levels, soil deterioration is unabated.
The contribution of livestock sector in the year 2010-11 to the Gross State Domestic product at current prices was 2.58 percent and it constituted 24.80 percent the total agriculture and allied sector. The dairy sector in Tamil Nadu, is mostly in the hands of 2 million marginal and landless farmers. In addition, this sector is highly gender sensitive and about 90 percent of the activity related to the care and management of livestock are carried out by the women folk.
Tamil Nadu is known for its native breeds like Kangeyam, Umbalachery, Burghur, Pulikulam, Alambadi and Toda buffalo. They account for 5 percent of the total bovine population of the State. The breeds are highly adapted to local agroclimatic conditions and low management practices. The typical characteristics of the breed include high resistance to diseases, tolerance to high temperature, high fertility, adapted to the tropical environment and possess unique ability to survive even with poor quality feed.
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