The southern districts of Tamil Nadu have always lagged behind in industrial development with the lack of major investments flowing into the region. Industries also felt that the southern part of the second-most industrialised State in the country didn’t share the same competitive advantage that Chennai and its neighbouring districts enjoyed for decades.
But, things seem to be changing now with emerging sectors expressing their interest in setting up shop in the southern districts, especially Thoothukudi, and Tirunelveli, which have emerged as hotspots for renewable energy projects.
“The Chief Minister has asked us to focus on south of Tamil Nadu. Before the Global Investors Meet (GIM) 2024, you will see a lot of investments going to south,” said Minister for Industries, Industrial Promotion and Commerce, T.R.B. Rajaa, after a tour to three Centres of Excellence set up by Tamil Nadu Industrial Development Corporation Ltd. (TIDCO) in collaboration with global OEMs such as Dassault Systemes, Siemens and GE Aerospace, on Thursday.
Since June 2021, according to data available with The Hindu, as many as 45 MoUs with a committed investment of ₹1,05,278 crore have been signed for the southern region. These MoUs are expected to provide employment opportunities to 70,575 people. Of this, four projects have already commenced, while eight projects have begun partial production. Most of these projects are in Madurai, Dindigul and Thoothukudi regions. Construction work has begun for eight other projects, while a furniture project and an ethanol project at Thoothukudi have sought approvals (under single window). Apart from this, land purchasing has been done in the case of three projects and identification are in progress for another eleven projects. Land identification is under process for the Petronas project of ₹30,000 crore and ACME Cleantech of ₹52,474 crore at Thoothukudi. It is also learnt that of these 45 MoUs, two investments are yet to commence any activity, seven have been put on hold for various reasons, and one project in the furniture space has been dropped.
A quick look at data between 2016-2021 shows that around 21 investment proposals with a cumulative investment of ₹15,543 crore and employment opportunities to 10,316 persons were signed. Of this, as on August 22, 2023, around 12 projects have commenced production, two have started partial production and construction work has commenced for one project. A pharmaceutical company has sought approvals (under single window or otherwise), two food processing firms have purchased land, one textile project at Theni has been put on hold, while a general manufacturing project at Tirunelveli has been dropped.
Industrialists in this region said that though this is a positive sign the government needs to do more as these investment figures are minuscule. Many of them pointed out that some of the southern districts in Tamil Nadu are facing environmental concerns, such as water scarcity and pollution. They also suggested that the government should look at social infrastructure and night life in these regions.
Ar. Rm. Arun, president, Southern India Chamber of Commerce and Industry, recommended the Tamil Nadu government create a Southern Districts Development department, headed by a senior bureaucrat, to ensure that there is a sustained focus on the holistic development of the State. “There needs to be segments of the Global Investors Meet (GIM) conducted in south of Tamil Nadu so that investors could see first hand the investment potential of the State. Guidance Tamil Nadu needs to have a dedicated team to promote south in the run up to the GIM,” he said.
Mr.Arun added: According to a 2021 report by the World Bank, the southern districts of Tamil Nadu have a lower road density than the state average. The report also found that the southern districts have a lower proportion of paved roads and a higher proportion of rural roads. “A 2022 survey by the National Skill Development Corporation found that the southern districts of Tamil Nadu have a lower proportion of skilled workers,” he pointed out.
An industrialist from Madurai, who wished anonymity, said, “The State needs to bring in investments that would provide jobs for the highly skilled workforce, and the educated youth in this region otherwise this talent would move to Chennai and Bangalore. Road infrastructure and connectivity should be further enhanced in the Southern region. These are key things that investors look at.”
