Political economy of Tamil Nadu[edit]

India is a large country of different peoples, cultures, languages and landscapes. As a country with a quasi-federal structure of Governance, a lot of the successes and failures of state governance and economies can be attributed to state specific socio-economic contexts and policies.

For decades, Tamil Nadu has consistently performed above national averages for Social and Economic indicators and is today the 2^nd largest economy in the country after Maharashtra.^[22][23]These successes are impossible to discuss without acknowledging the unique Political Economy of the state as most of the growth seen by Tamil Nadu happened after national political parties lost relevance in the state and were replaced by local Dravidian Parties. Since the 1967 legislative assembly election in Tamil Nadu, the state has been ruled either by the DMK or its offshoot and rival, the AIADMK. Today, the 2 large Dravidian parties, the DMK and AIADMK together control 199 seats out of the 234 seats in the Tamil Nadu Legislative Assembly.^[24]

In the 1960s, TN was lagging behind the Indian average in many socio-economic indicators. It’s Urban and Rural poverty rates were worse than the pan-Indian average but as of 2011-12, poverty rates had come down to 6.5 percent, 3^rd lowest among major states and lower than the economically important states of Maharashtra and Gujarat.^[25] While Tamil Nadu, along with Maharashtra and Gujarat is among the most industrialised states in India, what makes Tamil Nadu distinct is the labour-intensive, spatially and socially inclusive nature of its industrialisation, drawing a greater share of its population away from Agriculture.^[25]

Socio-politics of pre-independence Madras Province[edit]

The growth of Tamil Nadu can be attributed to the unique development of the state’s socio-political sphere. During the British rule of India, the territory of what is today Tamil Nadu was a part of the Madras Province.

Through scriptural sanction of Caste Hierarchy, the Brahmin community held a hegemonic position in South and Western India, unlike in other parts of the country. The colonial state opened up new spaces of mobility for local elites, through modern education. This led to engagement with the state and the formation of a thin civil society. The dominance of caste elites continued as their position in the caste hierarchy was accompanied by their entry into positions of power in the colonial bureaucracy, though they had to give up some orthodox practices. Colonialism also brought ideas of modernity that allowed for contestations of the terms on which colonial power was exercised. This led to the formation of the Justice party, to represent non-brahmin interests.^[25]

Rationalist literature was used for the critique of Social power in a caste society. The caste elites drew support from western orientalists and Theosophists like Annie Basant who saw eastern spiritual traditions to be more sophisticated, and went on to promote and privilege native religious traditions that upheld caste hierarchies and caste based division of labour. Rationalists however criticised practices that justified inequality and unscientific beliefs. The Hindu Freethought society, later renamed to the Madras Secular society published journals in English and Tamil that carried critical news and discussions on latest scientific discoveries and implications for religious beliefs and practices. Many published articles engaged with what was seen as the irrational basis of Christianity and Hinduism. Many articles also questioned restrictions on women, the validity of child marriage, ban on widow remarriage, caste hierarchies and exploitative relations between the upper and lower castes. They called for new ethics based on the principles of Liberty, Equality and modern Rationality rather than rely on old scriptures.^[25]

In a context where claims of religions were being evaluated through rationalist parameters, the dominance of caste elites could no longer be maintained through faith alone and thus, they began validating their practices through scientific logic. Untouchability for example was justified on the basis of Hygiene. The caste system was validated in terms of a natural division of labour that aided production and specialisation. Eugenics were used to argue for the ideas of ‘innate supremacy’ of caste elites. Simultaneously, there were also efforts to establish an equivalence between the culture of caste elites and the Indian nationalist culture. As the upper castes dominated the professional and administrative elites, efforts to conceptualise a tradition and culture that was ‘Indian’ was by default traditions that upheld caste privileges. The caste elites drew upon Material produced by orientalists like Max Muller, in addition to Theosophists like Annie Basant. The Orientalists saw in the Vedas and other Sanskrit texts, the essence of Indian civilisation, and this was crucial to the caste elites’ imagination of what was authentically Indian and ‘national’. Muller wrote that threats to this ‘Indian’ culture came from inferior people inhabiting the sub-continent who corresponded to lower caste ‘non-Aryans’. The combination of Orientalist and Theosophist constructions of ‘authentic Indian culture’ reinforced the Brahmin claim for superiority in the Caste hierarchy and their social practices as the core of an ‘Indian National Tradition’. Therefore, the elevation of Sanskrit and Vedic traditions as ‘Indian national traditions’ was seen to simultaneously emaciate other cultural tradition and languages – Tamil in the context of the Madras Province.^[25]

The power held by Caste elites in the cultural-ideological sphere was combined with the securing of power in the Material Domain as well. At the turn of the 20^th century, upper castes held a disproportionately large share of seats in Higher education and Jobs in the colonial administration. Lawyers from upper castes, as arbitrators of claims over property, amassed considerable wealth and power. Thus, the monopolies held by the upper castes helped them reinforce ideas of the natural superiority of their intelligence over other castes and of their caste status. Since the domain of formal politics operated on the terms set by Colonialism, the upper castes were able to exercise disproportionate control and could effectively combine their hegemony over cultural and material domains. They thus inscribed their authority by forging links between a ‘Hindu’ past and an ‘national’ culture and combining it with power in the material domain through control over bureaucracy and Judiciary. They used courts and legislature to preserve ‘Hindu’ practices, and hence perpetuate their dominance across domains.^[25]The following table shows the distribution of selected jobs among different caste groups in 1912 in Madras Presidency.^[26]  

Rise of Dravidian politics[edit]

It is this context of upper caste hegemony that gave rise to Dravidian politics. The Hindu-India-Sanskrit spheres that sustained Caste elites dominance in the material and social domains is what the Dravidian movement sought to undermine through espousing a new chain of equivalence: Dravidian-Tamil. The discovery of a wealth of ancient Tamil and ancient Dravidian language literature, along with the discovery of the independent origin of Dravidian languages from Sanskrit, further helped build a counter-narrative.^[25]

In the material domain, the colonial sphere opened up opportunities, albeit unequal, for non-brahmin elites. At the turn of the 20^th century, Brahmin dominance in this sphere began to be questioned and countered by these elites, with their focus primarily around the greater share of opportunities opened up by Colonialism. In 1916, the South Indian People’s Association was founded to publish newspapers and the South Indian Liberal Federation was founded as a political association that was renamed into the Justice Party a year later. The Association released a manifesto questioning the oligarchic control over education and employment in public administration by Brahmins and demanding a rightful share of employment and education for all community. Following the Montagu-Chelmsford reforms, limited franchise elections were held in Madras Province and the Justice party formed the Government from 1921-to 1926, and then after a break, again till 1930. They passed landmark legislation such as communal representation on employment, noon meals for children in Madras city and Government control over Temple funds. Legislation emphasising Education, Health and communal representation resonated with subsequent developmental interventions.^[25]

Ideologues of the Justice party and subsequently, the Self-Respect Movement (SRM) under Periyar, arguably the most important ideologue of Dravidian politics, emphasised productive versus unproductive castes dichotomy to reveal the exploitative nature of caste relations and hierarchy. They pointed out that despite wealth being generated by non-Brahmin productive castes, it was appropriated by the Brahmins via temples or when they had to rely on Brahmins for legal counsel and support. The fact that Brahmins also controlled vast tracts of fertile lands through temples, furthered this sense of domination. They called for a technical education that would further Productive Industrial development rather than an education that produced clerks who were seen to add little value to Society.^[25]

Though the SRM was appreciative of the efforts of the Justice party, Periyar pointed out that the domination of Brahmins became visible to the ideologues of the party only when they occupied positions of power in the Colonial administration, while they failed to recognise the Brahmanical power that permeates the Cultural and Social domains, conceding their privileged role in Religious rituals and practices. In other words, they wanted to replace Brahmin elites with another set of elites or broad base the social composition of elites. Critiquing the primary focus on acquiring a share of government jobs, Periyar asked what would such an agenda mean for the common people who would continue to labour through their lives and supplicate for material and spiritual favors due to their beliefs. Referring to the upper caste status of many Justice party leaders, he emphasised that non-Brahmins, being over 90 percent of the population, couldn’t be represented by 5 percent who were Kings and Zamindars (Landlords). The Justice party did not see caste in relational terms but as a separate non-Brahmin group that is trying to compete with Brahmins. Such an approach fails to see that claim to ‘Brahminhood’ also creates a corresponding ‘Shudrahood’ and ‘Panchamahood’. Claims to superiority simultaneously inferiorise others, and this claim was made through religion. Periyar argued that the most important dimension of being Human, and what distinguishes them from Animals is the sense of dignity (maanam) that can only come from self-respect (suya-mariyadhai). He also emphasises experiential equality as fundamental to the idea of Equality. Only when people share a similar experience can they develop a sense of fraternity and belonging. By combining the domain of the material and cultural-ideological, upper-caste hegemony denies the possibility of both experiential and material equality, and hence any degree of self-respect. He therefore articulated a demand for ‘equal rights’ that can be claimed by all and that this was the basis on which democracy ought to be imagined. It is the upper caste valorisation of Sanskrit and construction of practices and traditions that privileged their status, which has managed to sustain a hierarchical society and deny self-respect to the subaltern castes.^[25]

Therefore, unlike the Justice Party, the SRM was clear that the demand for communal representation was not merely about the redistribution of jobs and power in the modern economy, but was a demand meant to erode the power of Caste elites, and therefore make way for the democratisation of social values and realisation of self-respect. Access to jobs would be helpful but are not an end in itself. Another important shift in the politics of the SRM was its transformation into a mass-movement, that began to draw in various subaltern communities and caste groups over a period of time. The Dravidian movement could link the diverse critiques of the caste system and ways of upholding caste hierarchies and division of labour including Saivite, Dalit, Socialist and Rationalist critiques into a common frontier, and imagine a politics that could aggregate these demands. Ideologues of the Dravidian movement held that the caste based division of labour not only generated social inequality but most importantly denied economic opportunities to the lower castes as it tied them to traditional occupations that were deemed inferior. A move away from demeaning physical labour marked by inferiorised caste identities, and entry into modern occupations that were less marked by caste, was therefore seen as important. Periyar also pointed out the inefficiencies inherent in traditional artisanal production and called for incorporation of modern production technologies that can render menial, ritually marked labour, redundant. On the question of exploitation of labour, he makes a distinction between the ‘caste-labourer’ and the ‘wage-labourer’ even as he seeks to bring them together under the Dravidian fold.^[25] C.N. Annadurai, another important idealogue of the Dravidian movement and the founder of the Dravida Munnetra Kazhagam (DMK), a Dravidian party founded in 1949 and sought to enter electoral politics, also emphasized the dual identity of the worker. In his book, Panathottam, during a strike by textile-mill workers, he calls upon his party members to communicate with other poor people, the reasons behind the protests of the mill workers. They are Dravidians too like the rest of Tamils, he says, and hence it is important that people realise how their fellow man is being oppressed. He further points out that for the worker, all he knows is the struggle in his life. To him, all the Aryan-Dravidian divide may seem like a lot of noise. But, we (party members) know both. It is therefore understandable that they may forget about us but it is an unpardonable crime if we forget them.^[25]

Another key aspect of Dravidian politics is the regional dimension, and freedom from domination exercised through networks of pan-Indian power. As caste elites sought legitimacy through the nationalist movement by inscribing their culture into the national, the Dravidian movement sought to build on the critiques of this tradition through a call for an alternative society that could be realised by mutual respect and solidarity. Given the interlocking of the socio-economic domination by the upper castes, with domination of capital accumulation by mercantile elite at the pan-Indian level, this alternative society could only be realised at the sub-national level. This imagined community would not be based on an appeal to ethnicity but to a community of the oppressed, be it terms of caste, gender, language, race, ethnicity or religion. While Periyar did not believe in territorial nationalism, the Dravidian movement did hold that it’s vision of Social Justice could only be secured through regional autonomy and Federalism, which has become major agenda of Dravidian parties.^[25]

The Dravidian movement, through its appeal to the Dravidian-Tamil identity thus built a Dravidian ‘common-sense’ that spoke to these groups simultaneously even though some groups may have adversarial relations with each other. The components of that ‘common-sense’ and the pillars of Dravidian politics may be identified as:^[25]

• The necessity of Caste based reservations (affirmative action)

• Recognition of the importance of a Productivist ethos

• Broad basing of mobility into the modern economy

• Regional autonomy and an anti-Hindi stance due its ties with Sanskrit which has links to scriptural sanction of caste and gender hierarchies and hence its association with a denial of substantial democracy.

Dravidian politics and the economy[edit]

Democratising access to modern education and employment in the modern economy was seen as the key to undermine caste relations of hierarchy, as it opens up possibilities to move away from caste-inscribed labour. Movement from rural to urban too, was seen as a movement from ‘pre-modern’ time- spaces ridden with caste and gender hierarchies, where work and labour only serve to reproduce identities, to spaces that potentially allow for new mobilities, economic and social. While the Dravidian movement did recognise the importance of economic-asset-based inequality and economic-asset based inequality and economic exploitation of labouring classes by capitalists and land-owning classes, emphasis was placed more on relations of power emanating from caste-based division of labour.^[25]

Affirmative action policies not only enable equality of opportunity but are also redistributive measures given the scarcity of public goods such as higher education or secure, well paid employment. Unlike traditional left mobilization, like in West Bengal under the rule of CPI(M), that saw land reform as the axis of redistributive politics, Dravidian mobilization privileged undermining of status-based power by broad basing access to education and non-farm jobs as important pathways to mobility without discounting the role of landed power.^[27] Periyar believed that redistribution of property without abolition of caste-based privileges is unlikely to lead to an egalitarian system due to the entrenched power of the caste elites. Redistribution of economic assets at one point in time without ensuring a sense of self respect, will only lead to assets going back to the upper castes. He used the example of lawyers appropriating lands from traditional land owners to drive home this point. This vision of social justice thus tied to inclusive modernization, and to the developmental logic of structural transformation. Justice is therefore linked to the ability to transform the economy from a predominantly agrarian economy marked by poor returns, low productivity and caste rigidities to a structurally diversified and modernized one.^[25]

It is important to elaborate the view the Dravidian movement held towards capital accumulation. As structural transformation and modernisation could not take place without capital accumulation, the Dravidian ideologues were not antagonistic to it, though there was a call for a strong public sector and for the strengthening of cooperatives. They envisioned a democratisation of the accumulation process and privileged the role of regional capital as opposed to the mercantile big business groups from the north that wielded control in the Presidency and also wrested most concessions from the government. In Annadurai’s Panathottam, he asserts that manufacturing is the lifeline of any country, he contends that the reason for the state’s backwardness was essentially the absence of state support for modern industrialisation. He goes on to accuse the Congress government (then in power in Tamil Nadu) of not being able to tap into the region’s geo-economic potential at the centre of the Indian ocean, by failing to establish any economic links with South East Asia (1949: p. 25). He further laments the siphoning of savings from the state through the banking system to fund the accumulation of elite north indian business communities. This position against north Indian big business was accompanied by a demand for public ownership of industries, and encouragement of local capital.^[25]

Institutionalised populism of Dravidian politics[edit]

The Dravidian parties have a history of populist policy making in Tamil Nadu. Populism was arguably institutionalised by the Dravidian parties in the state. Populist policies in the state can be split into two broad domains: the ‘Social popular’ and ‘Economic popular’. Social popular policy interventions were rights-based interventions such as ensuring inclusive access to public goods such as education and health, inclusive access to modern sectors, the beureaucracy and organized sector employment. These processes ensured the rights of the excluded such as lower castes and women, in order to undermine the underlying social basis for generating unequal outcomes in the long run. Social popular interventions have a long-term programmatic commitment and seek to address the basis of Social backwardness such as caste and gender hierarchies. While social popular policies attempt to democratise power and access, ‘economic popular’ policies are rooted in patronage and emanate through governmental imperatives. Economic popular policies seek to address specific grievances of specific groups. While Social popular policies works on a populist logic of equivalence, economic popular policies largely operates on a differential logic of governability. The ‘Social popular’ interventions adopt longer timescales as they confront the factors that reproduce social domination, while the ‘economic popular’ interventions follows the temporality of the election cycle, tending to generate interventions that depoliticise poverty. While the former seeks to enable the social basis for change, the latter seeks to be status quoist. Therefore, Social and Econmic popular policies can be differentiated by both their intent and content. But, outcomes from both the domains are likely to overlap, with economic popular policies mobilising groups on a social popular agenda. When populism was insitutionalised through the capture of state power by Dravidian politics, three broad domains were transformed.^[25]

1. It laid basic foundations for structural transformation through investments in Economic and Social infrastructure.
2. It democratised state institutions including the bureaucracy and access to Education.
3. It managed to build a confident people and electorate with a broad based ‘capacity to aspire’ and demand.

While social popular interventions could redistribute assets like human capital, economic popular interventions can also be socially empowering such as the provision of free school meals for children or bicycles for girls attending high school.

Let us take the example of policies meant to empower women in Tamil Nadu, to observe how similar interventions can be distinguished by their Popular logic. The DMK brought an amendment to the Hindu Succession Act that ensured equal shares for women in ancestral property. Along with this, the party also brought in schemes to support marriages of Inter-caste couples and remarriages of widows as incentives to undermine caste and gender hierarchies, in line with the interpretation of feminism by the Self respect movement. Though these schemes were rooted in the normative ideals of social justice and located in the domain of Social popular, they did not translate into electoral dividends. Later, the AIADMK, an offshoot and electoral rival of the DMK, introduced a scheme that offered four grams of Gold and up to INR 50,000 to poor women for marriage if they had completed a degree or diploma. Though it was aimed at incentivizing girl students to pursue higher education before marriage, it was designed more as a clientelist scheme. While both types of schemes share welfare content, the former is located within a narrative of gender and caste justice whereas the latter assumes the form of patronage. While the social popular policies laid the foundation for economic transformation that became visible in the 90s, such transformative policies were not always helpful electorally. Over time, potential for social popular intervention reaches a limit and its capacity to build electoral support. For example, universalisation of primary education once achieved, exhausts its electoral appeal. As social popular exhausts its potential, the economic popular assumes importance due to immediate electoral compulsions.^[25]

Democratisation of education[edit]

Today Tamil Nadu is among the states with the best educational outcomes. The state has high levels of literacy across social groups and nearly 50 percent of youth finishing school enter tertiary education. This can be attributed to ‘Social popular’ policies, that has universalized primary education and affirmative action in higher education, while ‘economic popular’ policies like free school meals, group specific economic incentives and subsidies that reduce the cost of education has played supplementary role. Today, Tamil Nadu has one of the best indices of infrastructure for Primary schools such as electricity, drinking water and separate toilets for girls. It also has a lower pupil-student ratio than the Indian average. NITI Aayog's school education quality index ranks Tamil Nadu along with Kerala as having the best school education in the country based on 30 indicators.^[25]

There exists an elite bias in the provision of public services such as health and education in India. Throughout India, higher and technical education, up till the 80s were developed at the expense of basic education. This bias meant that higher education continued to be the preserve of upper classes and castes, widening the divide in access to higher education, as lower classes and castes couldn't catch up and be represented in higher education due to the abysmal status of primary education. But socio-political changes in Tamil Nadu allowed it to buck this trend since there were heavy investments into universal primary education in the state until it was deemed sufficiently developed. Investments were then targeted at developing secondary education and then tertiary education.^[25]

Though the state ranks only eighth in terms of per-capita expenditure on education, the quality and composition of the expenditure has made a difference. As mentioned previously, the state has steadily shifted its priority from primary to higher levels of education to match growing demand. In 1955-56, 70% of Tamil Nadu's educational expenditure was on primary education, coming down to 52 percent in 1980-81, while share of secondary education went from 20 to 29 percent and share of tertiary education going from 11 to 19 percent. Efficient public expenditure implies lesser expense to households. According to the 2014 national sample survey, the average expenditure of a senior secondary school student in Tamil Nadu was INR 2862, less than half of the Indian average of INR 6916, while an upper primary student in the state pays INR 1518 with the Indian average at INR 2171. The lower expenditure is a result of financial incentives that ensure children from less privileged backgrounds enter schools. We must not forget that the positive outcome in education is a result of a near century long mobilisation for equal access to education, allowing people to escape poverty and enter the modern economy. The state has also focused on inclusivity in higher education. There exists an extensive affirmative action program to ensure pupil from all communities are represented at tertiary education.^[25]

Macroeconomic trend[edit]

Socialist boom[edit]

Real GSDP per capita grew 96 per cent during 1980–95.

Capitalist boom[edit]

Real GSDP per capita grew 188 per cent during 1995–2014.

Economic boom[edit]

Real GSDP per capita grew 35 per cent during 2014–21.

Sectors[edit]

Agriculture and livestock[edit]

Tamil Nadu has historically been an agricultural state, while its advances in other fields transformed the state into being an industrialized and innovation based economy, leading to competition for land and its resources. Agriculture is heavily dependent on the river water and monsoon rains. The perennial rivers are Palar, Cheyyar, Ponnaiyar, Kaveri, Meyar, Bhavani, Amaravathi, Vaigai, Chittar and Tamaraparani. Non-perennial rivers include the Vellar, Noyyal, Suruli, Siruvani, Gundar, Vaipar, Valparai and Varshali. Tamil Nadu ranks first in Cloves production with 1,059 metric tons in the year 2022. Tamil Nadu is the highest producer of bananas and coconuts in the whole country. It is also a leading state in production of other crops such as sugarcane, cotton, kambu, maize, rye, groundnut and oil seeds. At present, Tamil Nadu is India's 4th largest producer of rice behind West Bengal, Uttar Pradesh and Punjab^[28][29] Tamil Nadu is the home to Dr. M. S. Swaminathan, known as the "father of the Green Revolution" in India.^[30] The state is one of the major producers of turmeric in India.

Given below is a table of 2015–16 national output share of select agricultural crops and allied segments in Tamil Nadu based on 2011 prices^[31]

Mining[edit]

This is a chart of proven reserves of major minerals of Tamil Nadu^[32] by Department of Geology and Mining with figures in tonnes.

Tamil Nadu has a few mining projects based on Titanium, Lignite, Magnesite, Graphite, Limestone, Granite and Bauxite.^[33] The first one is the Neyveli Lignite Corporation that has led development of large industrial complex around Neyveli in Cuddalore district with Thermal power plants, Fertilizer, Brequetting and Carbonisation plants. Tata Iron and Steel Company (TISCO) have entered into MoU with Government of Tamil Nadu in June 2002 for establishing a titanium dioxide (TiO₂) plant with a project outlay of $650 million. Magnesite mining is done at Salem apart from which mining of Bauxite ores are carried out at Yercaud and this region is also rich in Iron Ore Kanjamalai. Molybdenum is found in Dharmapuri, and is the only source in the country.

Energy[edit]

Tamil Nadu, being an industrialized and urbanized state, is among the top 3 states with respect to generation of electricity. The total installed capacity of Tamil Nadu stands at around 30200 MW as in September 2018, that derives 11500 MW of power from solar and wind energy. Tamil Nadu has the distinction of being the leader in renewable energy in India by adopting clean sources of energy and having established wind farms as early as 1995. Today it produces more wind power than Denmark and the Netherlands.

Wind energy[edit]

The Tamil Nadu Energy Development Agency (TEDA) is a Tamil Nadu government promoting renewable energy sources and energy conservation activities. The agency has largely been responsible for instigating the tremendous growth of Tamil Nadu in the development of wind power.^[34] The total installed capacity of windmills in Tamil Nadu totals to around 8700MW. Muppandal wind farm is a renewable energy source, supplying the villagers with electricity for work.^[35][36] Wind farms were built in Nagercoil and Tuticorin apart from already existing ones around Coimbatore, Pollachi, Dharapuram, Kangeyam and Udumalaipettai.

Solar[edit]

In March 2008, Signet Solar Inc.^[37] signed a memorandum of understanding with the State government to build a INR 20 billion thin-film silicon photovoltaic module manufacturing plant in the Sriperumbudur Special Economic Zone.^[38] In June 2008, Moser Baer inked a MoU with the state government to build INR 20 billion plant for manufacturing of silicon-based photovoltaic thin film modules and allied products in the Oragadam Special Economic Zone which is closer to the Signet Solar's plant in Sriperumbudur.^[39]

Nuclear[edit]

The Kalpakkam Nuclear Power Plant, Ennore Thermal Plant, Neyveli Lignite Power Plant, Virudhachalam Ceramics and the Narimanam Natural Gas Plants are major sources of Tamil Nadu's electricity. It is presently adding the Koodankulam Nuclear Power Plant to its energy grid. Tamil Nadu sources some of its power needs from renewable sources with wind power contributing over 2000 MW or over 20% of the needs. Tamil Nadu is facing largest power shortage since 2009 (34.1% deficit), the highest in the country, due to industrialization over the last decade.^[40] India's leading steel producer SAIL has a steel plant in Salem, Tamil Nadu.^[41] Tamil Nadu ranks first nationwide in diesel-based thermal electricity generation with national market share of over 34%.

Hydroelectric[edit]

The Mettur Dam is one of the largest dams in India. It was completed in 1936. The total length of the dam is 1700 meters. It is also called Stanley Reservoir. The Mettur Hydro Electrical power project is also quite large Mettur Dam. Mettur has a number of industries (50 km from Salem city): SISCOL,^[42] MALCO (Madras Aluminium Company owned by Vedanta Resources), Chemplast (former known as Mettur Chemicals),^[43] Thermal power plant, Hydel power plant and huge number of chemical industries. There are many other dams that provide irrigation and drinking water, including the Vaigai Dam.

Bio-diesel[edit]

Tamil Nadu at this time is the only state to have a formal Bio-Diesel Policy to use jatropha crops as a source of biofuel and to distribute wasteland to the poor farmers for the planting of these crops.^[44]

Industry and manufacturing[edit]

One of the global electrical equipment public sector company BHEL has manufacturing plants at Tiruchirappalli and Ranipet. The Tamil Nadu state government owns the Tamil Nadu Newsprint and Papers (TNPL),^[45] the world's biggest bagasse-based paper mills in Karur and Tiruchirappalli . The world's sixth largest manufacturer of watches together with TATA, under the brand name of "Titan" which has manufacturing plant in Hosur.^[46] 40 percent of all wind-generated electricity in India is created by windmills in Tamil Nadu. Danish wind power company NEG Micon has established its manufacturing unit in Chennai.^[47] Tamil Nadu is a leading producer of cement in India and with manufacturing units located at Ariyalur, Coimbatore, Karur and Tirunelveli. High-density Polyethylene mono filament yarn and associated products are manufactured in Karur for mosquito nets and fishing nets. More than 60% mosquito nets in India are manufactured here. The region around Salem is rich in mineral ores. The country's largest steel public sector undertaking, SAIL, has a steel plant in Salem.

Coimbatore is a major industrial hub in South India and houses more than 30,000 small, medium and large industries. Coimbatore is known as "Manchester of South India" due to its extensive textile industry and also referred to as "the Pump City" as it supplies half or 50% of India's requirements of motors and pumps.^[48] The city is one of the largest exporters of textile, jewellery, wet grinders, poultry and auto components and the term "Coimbatore Wet Grinder" has been given a Geographical indication. Larsen & Toubro has 300 acre huge manufacturing campus in Coimbatore which houses various units of company, manufactures aerospace and defence parts for leading players in the market.

Tuticorin is known as "Gateway of Tamilnadu". Thoothukudi is the major chemical producer in the state. It produces the 70 percent of the total salt production in the state and 30 percent in the country.

IT/ITeS-Software[edit]

Tamil Nadu is one of the largest contributor of software exports majorly from its cities Chennai, Coimbatore, Trichy, Salem^[49] and Madurai . State has 526 engineering colleges, the most for any state in India giving the services industry access to qualified and skilled labour force. The top engineering colleges in Tamil Nadu have been a major recruiting hub for the IT firms. According to estimates, about 50 per cent of the human resources required for the IT and ITES industry was being sourced from the state.^[50] The state has a wide network of about 110 industrial parks and estates offering developed plots with supporting infrastructure.^[51] Also, the state government is promoting other industrial parks like Rubber Park, Apparel Parks, Floriculture Park, TIDEL Park for IT/ITS, TICEL BioPark for Biotechnology,^[52] Siruseri IT Park, Elcot SEZ and Agro Export Zones among others. Tamil Nadu has the largest number of Small and medium enterprises (SMEs) in India.^[53]

Automotive[edit]

Chennai is nicknamed "The Detroit of Asia".^[54][55] It is home to large number of auto component industries. Over 11.2% of the S&P CNX 500 conglomerates have corporate offices in Tamil Nadu. Tamil Nadu has manufacturing facilities from automobiles, railway coaches, battle-tanks, tractors, motorbikes and heavy vehicles to ships.

Alstom has a manufacturing facility in Coimbatore which manufactures rail transportation products.

Vehicle parts manufacturers[edit]

Madras Rubber Factory the local tyre manufacturer is located in Chennai and Perambalur. TI cycles of Murugappa group have their units in Chennai. UCAL Carburettors, TRW Rane, TVS Group are established in Hosur.TVS Srichakra Tyre works at Madurai. Coimbatore is home to Pricol, Elgi Equipments, Craftsman, Roots Horn, Rolon Chains and numerous Tier-I part suppliers.

Transportation industry[edit]

Custom built trucks operated in Tamil Nadu, Kerala and Karnataka are from Tiruchengode, Sankagiri, and Namakkal. 90 Percent of Private busses operating in South India are built in Karur. Karur is well known for its bus body building industries. More than 150 Bus body building industries are located in and around Karur. Apart from that, mostly all the TNSTC, MTC, SETC and PRTC busses are built in Karur.

Textiles and apparels[edit]

Tamil Nadu used to be the textile hub of India Tiruppur "Dollar City" due to its cotton production and textile industries. The textile industry plays a significant role in the Indian economy by providing direct employment to an estimated 35 million people, and thereby contributing 4% of GDP and 35% of gross export earnings. The textile sector contributes to 14% of the manufacturing sector. From Spinning to garment manufacturing, entire textile production chain facilities are in Tamil Nadu. About half of India's total spinning mill capacity is in Tamil Nadu. The western part of Tamil Nadu, comprising Coimbatore, Tirupur, Erode, Namakkal, Karur and Dindigul, has the majority of spinning mills manufacturing cotton/polyester/blended yarn, open end yarn and silk yarn used by garment units in Tamil Nadu, Maharastra etc. Yarn is also exported to China, Bangladesh etc. Tirupur knitted garment units have been exporting garments for about 3 decades with 2015–16 exports in the range of US$3 Billion. Karur is the major home textile (Curtain cloth, bed linens, kitchen linens, toilet linens, table linens, wall hangings etc.) manufacturing and export hub in India. Erode is the main cloth market in south India for both retail and wholesale ready-mades. Madras (Chennai) has a large presence of woven garments (shirts/pants) manufacturing units. Madurai and Kanchipuram are famous for handloom sarees exported / sold all over India. Lakshmi Machine Works [LMW], one of the three major textile machinery manufacturing companies in the world is located in Coimbatore. Savio also has a factory in Coimbatore. Many textile component manufacturers are in Coimbatore and some export to the Europe etc.

Aerospace and defence[edit]

The defence industry in Tamil Nadu is one of the fastest growing sector in the states generating a huge amount of export revenue. The states serves as the headquarters for numerous defence manufacturing public undertakings such as Heavy Vehicles Factory, Combat Vehicles Research and Development Establishment, Ordnance Factory Tiruchirappalli, L&T Aerospace & Defence unit Coimbatore, LMW Advanced Technology Centre Coimbatore, Ashok Leyland Defence Systems, Mahindra Aerospace, Ramco Systems, TANEJA Aerospace and Salem Aerospace Limited.^[56][57] The state has the country's first defence corridor and aerospace park.^[58][59] The principal cities manufacturing defence and aerospace components are Chennai, Coimbatore, Tiruchirappalli, Salem and the secondary manufacturing cities are Nagercoil and Hosur.^[60][61] French aerospace and defence company, Airbus decided to invest 1 billion dollar (7,200 crores) in an aerospace project in Chennai.^[62] The company has also planned to build a helicopter assembly factory in Tamil Nadu.^[63] Tier - II cities of Coimbatore and Salem also serves as a major export hub for defence manufacturing firms.^[64] Defence, paramilitary and police personnel across the nation use guns, ammunitions and bullets manufactured from the city.^[65][66] Special grade steel used in making missiles are manufactured in Salem.^[67] India's multinational engineering conglomerate L&T joint venture with France-based MBDA, a world leader in missile systems planned a "L&T MBDA Missile Systems" facility at Aspen SEZ in Coimbatore serves as its hub to export fully assembled missile systems to Europe.^[68]

Tamil Nadu also is the hub station where the first Indian made Fifth-generation jet fighter plane is to be manufactured. The Aeronautical Development Agency, which conceived and designed the Light Combat Aircraft (LCA) Tejas, set the ball rolling for building the next generation defence aircraft, the Advanced Medium Combat Aircraft (AMCA), by initiating in Coimbatore to build a technology demonstrator. The project – to be implemented in Sulur in Coimbatore district which will house the permanent base of the Tejas squadron – marks one of Tamil Nadu's first major defence aircraft project.^[69]

Electronics[edit]

Electronics manufacturing is a growing industry in Tamil Nadu. Chennai has emerged as EMS Hub of India. Companies like Flextronics, Motorola, Sony-Ericsson, Foxconn, Samsung, Cisco, and Dell have chosen Chennai as their South Asian manufacturing hub. Products manufactured include circuit boards and cellular phone handsets.^[70] Ericsson also has a Research and Development facility in Chennai.^[71] Big EPC companies have set up their Engineering centres which include Saipem India Projects Ltd, Technip, Foster Wheeler, Schneider Electric, Mott MacDonald, Petrofac, Austrian company "Austrian Energy and Environment" have also a design office here besides local giant ECC Larsen & Toubro. Sanmina-SCI is the latest company to invest in Tamil Nadu to create a state of the art manufacturing facility.^{[citation needed]} Nokia Siemens Networks has decided to build a manufacturing plant for wireless network equipment in Tamil Nadu.^[72]

The state with a projected population of about 66.5 million in year 2009 has a high mobile market share in India. According to statistics released by Telecom Regulatory Authority of India (TRAI), the state had a total subscriber base of 43 million mobile customers at the beginning of August 2009.^[73][74]

Leather[edit]

Tamil Nadu accounts for 60 per cent of leather tanning capacity in India^[75] and 38 per cent of all leather footwear, garments and components. The state also accounts for 50 per cent of leather exports^[76][77] from India, valued at around US$3.3 billion of the total US$6.5 billion from India. Hundreds of leather and tannery facilities are located around Vellore and its nearby towns, such as Ranipet, Ambur and Vaniyambadi. The Vellore district is the top exporter of finished leather goods in the country. Vellore leather accounts for more than 37 percent^[78] of the country's export of leather and leather-related products (such as finished leathers, shoes, garments and gloves).

Hundreds of leather and tannery industries are located around Vellore, Dindigul and Erode its nearby towns such as Ranipet, Ambur, Perundurai and Vaniyambadi The tanning industry in India has a total capacity of 225 million pieces of hides and skins, of which Tamil Nadu alone contributes 70 per cent, a leading export product share at 40 per cent for India. It currently employs about 2.5 million persons. Leather exports by the end of 2000–2001 were INR90 billion.

Central Leather Research Institute, a CSIR research laboratory, is located in Chennai, the state capital.

Fireworks[edit]

The city of Sivakasi is a leader in the areas of printing, fireworks, and safety matches. It was fondly called as "Little Japan" by Jawaharlal Nehru. It contributes to 90% of India's fireworks production. Over 2,345 licensed fireworks factories are present around sivakasi city and around 2,34,000 people's are working.Sivakasi provides over 60% of India's total offset printing solutions. Only after Gutenberg in Germany, Sivakasi has more printing presses in the world.

Banking[edit]

The first modern bank in Tamil Nadu, Bank of Madras was started by the British in 1843. It was followed by the opening of other banks namely – Arbuthnot & Co, Bank of Chettinad, Bank of Madura, that were later merged under the supervision of RBI. The state serves as the headquarters for the second most banks in India, only next to the financial Capital Mumbai. The banking sector in Tamil Nadu is broadly classified into scheduled banks and non-scheduled banks. All banks included in the Second Schedule to the Reserve Bank of India Act, 1934 are Scheduled Banks. These banks are Scheduled Commercial Banks and Scheduled Co-operative Banks. Scheduled Co-operative Banks consist of Scheduled State Co-operative Banks and Scheduled Urban Cooperative Banks. Scheduled Commercial Banks in Tamil Nadu are categorised into five different groups according to their ownership and/or nature of operation:

• Nationalised Banks
• Private Sector Banks
• Foreign Banks
• Regional Rural Banks
• Small Finance Banks

The following are the list of Banks based in Tamil Nadu.

Transportation[edit]

Tamil Nadu has a well established transportation system that connects all parts of the state. This is partly responsible for the investment in the state. Though the present transportation system is substantial, it needs to be developed further to keep pace with the rapid increase in use.^[89] Tamil Nadu is served by an extensive road network in terms of its spread and quality, providing links between urban centres, agricultural market-places and rural habitations in the countryside.

Road[edit]

There are 28 national highways in the state, covering a total distance of 5,036 km (3,129 mi).^[90] The state is also a terminus for North-South Corridor Road (NH44) and the Golden Quadrilateral project that is 99.2% completed as of 31 July 2010.^[91] Chennai Mofussil Bus Terminus is the largest bus terminal in Tamil Nadu. The state has a total road length of 167,000 km, of which 60,628 km are maintained by Highways Department. This is nearly 2.5 times higher than the density of all-India road network.^[92] It ranks second with a share of over 20% in total road projects under operation in the public-private partnership model.^[93] It is currently working on upgrading its road network, though the pace of work is considered slow.^[94]

Railway[edit]

Tamil Nadu has a well-developed rail network as part of Southern Railway. Headquartered at Chennai, the present Southern Railway network extends over a large area of India's Southern Peninsula, covering the states of Tamil Nadu, Kerala, Puducherry, minor portions of Karnataka and Andhra Pradesh. Tamil Nadu has a total railway track length of 6,693 km and there are 690 railway stations in the state. The system connects it with most major cities in India. Main rail junctions in the state include Chennai, Coimbatore, Tiruchirappalli Junction, Erode, Dindigul, Katpadi, Thanjavur, Madurai, Salem and Tirunelveli. Chennai has a well-established Suburban Railway network, a Mass Rapid Transport System and is currently developing a Metro system, with its first underground stretch operational since May 2017. Rapid Transit (Metro) or Light Metro system in Coimbatore, Madurai and Tiruchirappalli are currently in under process ^[95]

Air[edit]

Tamil Nadu has a major international airport, Chennai International Airport, that is connected with 27 countries with more than 500 direct flights every day. Other international airports in Tamil Nadu include Coimbatore International Airport, Tiruchirappalli International Airport and Madurai Airport. Chennai International Airport is currently the fourth largest international airport in India after Delhi, Mumbai, and Bangalore has a passenger growth of 18%. It also has domestic airports at Salem, Thoothukudi making several parts of the state easily accessible. Increased industrial activity has given rise to an increase in passenger traffic as well as freight movement which has been growing at over 21.3 per cent per year.^[96]

Ports[edit]

Tamil Nadu has four major ports at Chennai, Ennore, Kattupalli and Tuticorin, as well as one intermediate port, Nagapattinam, and seven minor ports, Rameswaram, Kanyakumari, Cuddalore, Colachel, Karaikal, Pamban and Valinokkam of which are currently capable of handling over 73 million metric tonnes of cargo annually (24 per cent share of India). All the minor ports are managed by the Tamil Nadu Maritime Board.^[97] Chennai Port is an artificial harbour situated on the Coromandel Coast in South-East India and it is the second principal port in the country for handling containers. It is currently being upgraded to have a dedicated terminal for cars capable of handling 400,000 vehicles by 2009 to be used by Hyundai, Ford and Nissan Renault.^[98] Ennore Port was recently converted from an intermediate port to a major port and handles all the coal and ore traffic in Tamil Nadu. The volume of cargo in the ports grew by 13 per cent over 2005.^[99][100] The Tuticorin Port is expanding its facilities at the cost of US$1.6 billion.^[101] The Sethusamudram Shipping Canal Project will transform the Tuticorin port into a transshipment hub similar to those in Singapore and Colombo. The ports are in need of improvement and some of them have container terminals privatised.

Tourism[edit]

Owing to the ancientness and depth of its civilization, Tamil Nadu has been a hub for tourism. In recent years, the state has emerged as one of the leading tourist destination for both domestic and foreign tourists. Tourism in Tamil Nadu is promoted by Tamil Nadu Tourism Development Corporation (TTDC), a Government of Tamil Nadu undertaking. The state currently ranks the highest among Indian states with about 248 million arrivals in 2013.^[102] The annual growth rate of the industry stood at 16 per cent. Approximately 2,804,687 foreign and 111,637,104 domestic tourists visited the state in 2010.^[103]

The state boasts some of the grand Hindu temples built in Dravidian architecture. The Brihadishwara Temple in Thanjavur, built by the Cholas, the Airavateswara temple in Darasuram and the Shore Temple, along with the collection of other monuments in Mahabalipuram (also called Mamallapuram) have been declared as UNESCO World Heritage Sites. Madurai is home to the Madurai Meenakshi Amman Temple. Sri Ranganathaswamy Temple, Srirangam is the largest functioning temple in the world, Tiruchirappalli where the famous Rockfort Temple is located, Rameshwaram whose temple walk-ways corridor (Praagarams) are the longest 1.2 km (0.75 mi) of all Indian temples in the world, Kanchipuram and Palani are important pilgrimage sites for Hindus. Other popular temples in Tamil Nadu include those in Gangaikonda Cholapuram, Chidambaram, Thiruvannaamalai, Tiruchendur, Tiruvarur, Kumbakonam, Srivilliputhur, Tiruttani, Namakkal, Vellore, Karur, Bhavani, Coimbatore, Kanniyakumari.

Tamil Nadu is also home to hill stations like Udhagamandalam (Ooty), Kodaikanal, Yercaud, Coonoor, Topslip, Valparai, Yelagiri and Manjolai. The Nilgiri hills, Palani hills, Shevaroy hills, Kolli Hills and Cardamom hills are all abodes of thick forests and wildlife. Tamil Nadu has many National Parks, Biosphere Reserves, Wildlife Sanctuaries, Elephant and Bird Sanctuaries, Reserved Forests, Zoos and Crocodile farms. Prominent among them are Mudumalai National Park, The Gulf of Mannar Biosphere Reserve, Anaimalai Wildlife Sanctuary, Vedanthangal Bird Sanctuary and Arignar Anna Zoological Park. The mangrove forests at Pichavaram are also eco-tourism spots of importance.

Kanyakumari, the southernmost tip of peninsular India, is famous for its beautiful sunrise, Vivekananda Rock Memorial and Thiruvalluvar's statue built off the coastline. Marina Beach in Chennai is one of the longest beaches in the world. The stretch of beaches from Chennai to Mahabalipuram are home to many resorts, theme parks and eateries. The prominent waterfalls in the state are Courtallam, Hogenakkal, Papanasam, Manimuthar, Thirparappu, Pykara and Silver Cascade. The Chettinad region of the state is renowned for its Palatial houses and cuisine. With medical care in Chennai, Vellore, Coimbatore and Madurai, Tamil Nadu has the largest numbers in Medical tourism in India.

Services[edit]

Tamil Nadu has 526 engineering colleges, the most for any state in India giving the services industry access to qualified and skilled labour force. The state has a wide network of about 110 industrial parks and estates offering developed plots with supporting infrastructure.^[51] Also, the state government is promoting other industrial parks like Rubber Park, Apparel Parks, Floriculture Park, TIDEL Park for IT/ITS, TICEL BioPark for Biotechnology,^[52] Siruseri IT Park, Elcot SEZ and Agro Export Zones among others. Tamil Nadu has the largest number of Small and medium enterprises (SMEs) in India.^[53]

Software Parks

Tidel Park, Chennai

Tidel Park, Coimbatore

This is a chart of trend of software exports from Tamil Nadu published by Electronics Corporation of Tamil Nadu with figures in Crores of Indian Rupees.^[104]

Chennai is the second largest software exporter in India, next only to Bangalore. India's largest IT park is housed at Chennai. Software exports from Tamil Nadu during 2017–2018 rose 8.6% per cent to touch 1,11,179 crore, involving a workforce of 780,000.^[106] Chennai is the largest hub for e-publishing, as there are 67 e-publishing units registered with the STPI in Chennai and 25 in Bangalore. Companies such as HCL Technologies, NTT DATA, Wipro, Tata Consultancy Services, Capgemini, Amazon.com, LTI, Tech Mahindra, Infosys, IBM, Cognizant, Accenture, Sopra Steria, CGI Inc., Verizon, DXC Technology, Atos, Virtusa and many others have offices in Chennai. Infosys Technologies has set up India's largest software development centre to house 25,000 software professionals at an estimated investment of ₹12,500 million (US$150 million) in Chennai.^[108] India's largest IT park – SIPCOT is housed at Siruseri – Chennai, It has numerous IT companies such as TCS, CTS, Syntel, Steria, Polaris, Patni, Hexaware etc. Chennai has been rated as the most attractive city for offshoring services.^[109] Coimbatore is second largest Software exporter in Tamil Nadu with presence of Amazon.com, Bosch, Cognizant, Ford, NTT Data, TCS, Wipro, HCL, Capgemini, Harman, Deloitte. Cognizant has more than 13,000 employees working in Coimbatore, which is their second largest headcount in India after Chennai. Bosch has one of the largest R&D development centre in Coimbatore outside Germany which employees close to 5500 in the city. Madurai is the next biggest IT city. Companies like HCL, Honeywell are in Madurai. A new TIDEL park is proposed at Madurai Maatuthavani. The IT Companies like Capgemini, Sutherland, TTS Business Services, Sun Business Solution (Sun Group), Scientific Publishing, Omega Healthcare, Vagus Technologies, MMC Infotech are also in Tiruchirappalli.

Chennai has emerged as the "SaaS Capital of India".^{[110][111][112][113][114]} The SaaS sector in/around Chennai generated US$1 Billion in revenue and employed about 10000 personnel in 2018.^[113]

Government revenues[edit]

Tamil Nadu ranks fourth nationwide of all state governments in tax revenue. (See: States of India by tax revenues.) This is a chart of trend of tax revenues (including the shares from Union tax pool) extracted from the Consolidated Fund of the Government of Tamil Nadu^[115] with figures in millions of Indian Rupees. See also the Finance Commission of India report.^[116] Tax revenues of local bodies are excluded.

This is a chart of trend of non-tax revenues and grants-in-aid extracted from the Consolidated Fund of the Government of Tamil Nadu with figures in millions of Indian Rupees. See also ^[117] and.^[118] Non-tax revenues of local bodies are excluded.

Government debt[edit]

Amount in Crores:

Gallery[edit]

Notes[edit]

Citation[edit]