The road to a $1 trillion economy

These days, Tamil Nadu has been at the centre of national attention over a host of issues such as delimitation and the implementation of the National Education Policy (NEP) and the use of the Tamil letter ‘Roo’ (‘ரூ’ ) instead of the Indian currency symbol ‘₹’ in the promotional logo for the latest State Budget. Amid the brouhaha, the State government has brought out its maiden Economic Survey, a “report card” on the state of the Tamil Nadu economy.

The document has been published at a time when Tamil Nadu has set itself a more ambitious target of becoming a $1 trillion economy by 2030 than its southern neighbours — Karnataka by 2032; Andhra Pradesh ($2.4 trillion) by 2047; Telangana by 2034-35 and Kerala by 2047.

In an article published in The Hindu in December 2022, C. Rangarajan, former Governor of the Reserve Bank of India (RBI), and K.R. Shanmugam, former Director of the Madras School of Economics, stated that for the State to achieve its goal, it would need to grow at a nominal rate of about 18% and a real rate of 13%. However, according to the Survey, the State grew at an annual average rate of 8.2% over the last two years.

The State government’s official document, while discussing the target, acknowledges that Tamil Nadu “will need to sustain an annual growth rate of over 12%, driven by industrial expansion, infrastructure development and digital transformation.” Even though the document, published by the Tamil Nadu State Planning Commission, does not outwardly share the optimism of the State government with regard to the target of $1 trillion, it talks of the strengths and capabilities of Tamil Nadu, all of which can be productively used to position the State “strongly for sustained economic leadership” in the country.

One of the highlights of the document is the climate risk assessment, a study which has been done by Anna University, Chennai.

Using data from the 30 years ending in 2014, the study has given projections of the trends up to 2100 CE, forecasting a rise in the annual mean maximum temperature, the number of heat wave days and the annual average rainfall. As this area directly concerns people, the Survey’s analysis of the study requires larger debate across different sections of society. In a way, the Survey has set an agenda for the public discourse on the vital subject of climate change.

Another subject that the Survey has discussed is employment, where not-so-positive trends have been captured. This is not to gloss over the observation in the document that on the overall, there are indications of a better quality of employment with a higher share of the State’s workforce, including women, in regular employment. One of the findings of the Survey is that the unemployment rate has consistently been higher in urban areas than in rural regions.

Also, unemployment is more prevalent among those holding graduate and postgraduate (PG) degrees or diploma or certificate qualifications compared to others. Almost one-fifth of women graduates remain unemployed, and the unemployment rate with PG degrees is 11.6%. At the all-India level, the corresponding figures are 20.4% and 22.5%.

Even though the Survey has not discussed software exports much, it is well known that Tamil Nadu is way behind two of its “flashy” neighbours — Karnataka and Telangana. According to the 2022-23 annual report of the Software Technology Parks of India (STPI), software exports by STPI-registered IT and IT-enabled services (ITES) units in Karnataka were valued at about ₹ 3.55 lakh crore, while in Telangana, the figure stood at ₹1.2 lakh crore.

In contrast, Tamil Nadu’s software exports were valued at ₹74,000 crore. In fact, according to Karnataka’s latest Economic Survey, software exports for 2023-24 crossed the ₹4 lakh crore mark, reaching ₹4,04,165 crore.

The way forward

The authorities have done their part by bringing out an authentic document on the economy of Tamil Nadu, and in the coming years, they will keep on improving the document by incorporating more aspects of the economy. However, it is up to the intelligentsia and the media to discuss threadbare what is available to them. So far, silence has been the response.