The road to a $1 trillion economy Premium

T.N. faces hurdles such as unemployment, lower software exports, climate risks

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.