Regional imbalance in economic growth in TN  is of a lower degree: report

The study ‘Regional Growth Pattern in Tamil Nadu’ was undertaken by the State Planning Commission. It says there has been a conscious spread of the public utilities such as education and healthcare to all villages in the State

The regional imbalance in economic growth in Tamil Nadu is of a lesser degree when compared to other States. This has been possible primarily due to the conscious spread of public utilities such as education and healthcare to all villages in the State, according to a study on ‘Regional Growth Pattern in Tamil Nadu’, undertaken by the State Planning Commission.

The report was prepared by R. Srinivasan, full-time member of the State Planning Commission, and M.S. Elayaraja Research Associate, State Planning Commission. Mr. Srinivasan said the analysis of the Gross District Domestic Product (GDDP) of districts in Tamil Nadu over a period of nearly three decades indicated that the distribution of spatial and sectoral growth in Tamil Nadu was skewed, and the skewness was increasing. “The districts of high economic growth attract larger population and, hence, the demographic transition varies between districts,” he said in the report.

The study showed that districts having high GDDP (Chennai, Kancheepuram, Vellore, Erode, Coimbatore etc.) are located in the north and northwest, with the lone exception of Tiruchi in central Tamil Nadu. Districts having upper-middle GDDP (Salem, Madurai, Tiruppur etc.) are in the northwest and south Tamil Nadu. If we combine the districts having high and upper-middle GDDP, we find they are contiguous districts and, maybe, the economic growth is geographically contagious. The notable exceptions in this combined category are Dharmapuri and the Nilgiris.

Districts with lower-middle GDDP are predominantly in the Cauvery Delta, and in south Tamil Nadu (three districts). Districts with low GDDP are spread in northwest, Delta region, and south Tamil Nadu. “The northern zone with the highest size of economy of 36.6% of GSDP [Gross State Domestic Product] and 31.8% [of] the State’s population is the largest in terms of economy and demography. West zone comes next in terms of economy and demography with 29.6% of State’s economy and 22.8% of population. The per capita income of west zone is a little higher at 118% of State’s per capita income, than the 115% per capita income of the northern zone, mainly because of relatively lower proportion of population. The south zone has the third-largest economy at 18.8% of State’s GSDP and 20.5% of State’s population. The east zone has 15.1% [economy] of the State’s GSDP and 25.5% of State’s population, making it the lowest in terms of economy size and per capita income.”

The analysis also looked at zonal Gross Value Added (GVA) over a three-year period from 2017-18 to 2019-20. In the north and west zones, only three sectors have a contribution of over 10% each, and together they contribute over 50% of zonal GVA. They are — manufacturing; trade, repair services, hotels and restaurants; real estate, ownership of dwellings and business services. This shows that the GVA is skewed towards just three sectors in these two zones. Next to these three sub-sectors, construction and other services are the two sub-sectors that contribute substantially to their respective zonal GVA. The peculiarity of the west zone is its higher contribution from agriculture and livestock, compared to the north zone. The north zone has higher contribution from financial service compared to the west zone. In east and south zones, six sub-sectors contribute over 10% each, and together contribute over 60% of the zonal GVA. They are – agriculture; manufacturing; construction; trade, repair services, hotels and restaurants; and real estate, ownership of dwellings and business services and other services. In these two zones, the economy is more well-spread in terms of sub-sectoral contributions to zonal GVA compared to north and west zones.

Mr. Srinivasan, in the report, said development of infrastructure to expand economic opportunities to all the regions should guide economic policies to correct regional imbalances in growth.