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Infrastructure to the FORE

If you were from Chennai, you would like to savour these sweet some-things. If you are from elsewhere, don’t go green with envy.

  • When Chennai Metro was inaugurated earlier this year, a young woman was the engine driver. It was a national first.

  • BBC ranked Chennai as being amongst the five best cities in the world to live in.

  • In 2014, Lonely Planet named Chennai as one of the top 10 tourist destinations.

  • Chennai boasts of Asia’s largest clover-shaped flyover, largest bus terminus, largest IT park, largest library, the world’s second largest judicial complex and the second longest beach.

Chennai of-course belongs to Tamil Nadu, one of the most developed states in India. 

The state boasts of several laurels. It has time and again been voted as a best performing state. In 2015, the ASSOCHAM ranked it as first in eight out of the nine parameters of development. These include economy, power, roads, health, industrial development, income and equality and overall development. Wow.

So, what attracts investors to the state?

May be the fact that Tamil Nadu has continuously been on the path of development. The state’s GDP has been growing at a handsome 9.2 per cent CAGR across the last 9 years. At 8.4 per cent, Tamil Nadu ranks second in contribution to India’s GDP.

There are several other reasons as well.  Tamil Nadu is India’s most urbanised state, with 49 per cent of the population living either in cities or towns. At 20,000 MW, it has India’s largest power generation capacity and at 14.8 TBPS it has the longest telecom bandwidth.  Believe it or not, the State constitutes 15 per cent of India’s major port capacity and has historically a very strong road network.  There are 20 industrial parks and 28 operational SEZs placing Tamil Nadu third in India. Last, but not the least, with 300 multi-specialty hospitals the state is the country’s healthcare capital by a long distance.

The mushrooming of manufacturing industries, as also the arrival of KPO and BPO, have fuelled the high propensity growth of Tamil Nadu and of IT services in Chennai and Tier-2 cities. The state had more than 42,000 factories in 2014 including automobiles and components, textiles and garments, leather, chemicals and plastics, cement, castings and forgings, pumps and motors. Tamil Nadu attracted more than Rs. 44,400 crore in FDI in the last three years and signed 33 MoUs worth a total of Rs. 31,706 crore since May 2011. It ranks 3rd in cumulative FDI inflows into the country.

The Union Planning Commission ranked it among the top 9 states in this sector in 2014, thanks to the efficient clearance of finance and tax-related compliances; infrastructure and utility-related approvals; land and building-related approvals; environmental clearances and other business regulatory compliances.

On the flip side is the issue of antiquated labour laws.  There is already a recommendation to introduce online system of renewing licences and documentation of standard operating procedures to increase transparency and efficiency of inspection under the Factories Act. Secondly, Tamil Nadu lags in product innovation and scaling up companies. Other challenges include power generation, land acquisition and lack of infrastructure beyond Chennai.

Fuelling the growth is Prime Minister’s Make in India initiative, which the state is taking very seriously. The various sectors that are targeted include automobile, infrastructure, textiles, electronic hardware and renewable energy.

Another aim is Vision 2023 that envisions Tamil Nadu to be the most prosperous state by 2023. Plans are on for several developmental projects including additional investment regions, industrial corridors and manufacturing zones; increasing capacity of ports and airports; OFC and broadband connectivity to every village; integrated multimodal transport systems; 2.5 million affordable houses, piped 24x7 water for all and world class universities. Once these happen, the state will look unrecognisable. These initiatives are expected to generate a per-capita income of USD 10,000 per annum and 11 per cent GDP growth over the next decade.

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