Progressive social policies, robust infra, placed TN on economic growth trajectory: Economic Survey

Chennai, Mar 13 (PTI) Tamil Nadu’s progressive social policies, robust infrastructure facilities, and large skilled labour force enabled the state to place itself on an elevated economic development trajectory, making the state contribute 9.21 per cent to national GDP in 2023-24, Tamil Nadu's first economic survey 2024-25 said on Thursday.

The survey brought out by the State Planning Commission and handed over to Chief Minister M K Stalin, said the Gross State Domestic Product (GSDP) at current prices reached Rs 27.22 lakh crore in 2023-24, posting a nominal growth rate of 13.71 per cent and a real growth rate of 8.33 per cent.

"Tamil Nadu economy in 2024-25 faced global headwinds with its innate economic strength. The pandemic, coupled with geopolitical tensions and extreme weather events, disrupted global supply chains and triggered crises in the energy and food sectors," it said.

The global economy posted a real growth rate of 3.33 percent in 2023. India’s economy recorded 7.61 percent growth in 2022-23, 9.19 per cent in 2023-24, and 6.48 per cent in 2024-25.

"Building on a strong foundation of inclusive policies, Tamil Nadu has demonstrated remarkable economic resilience, consistently achieving growth rates of 8 per cent or more since 2021-22, and the state is expected to maintain a growth rate above 8 per cent in 2024-25," it said.

In 2022-23, Tamil Nadu’s per capita income was Rs 2.78 lakh, 1.6 times the national average of Rs 1.69 lakh. The state consistently outpaced the national average over the years and is the fourth-largest state in per capita income.

Tamil Nadu’s economic development is more evenly distributed across multiple urban centers. Cities like Coimbatore, Madurai, Tirupur, Tiruchirappalli, and Salem contributed significantly to the state’s economy, helping bridge the urban-rural divide.

In 2023-24, the services (tertiary) sector contributed 53.63 per cent of the state’s Gross State Value Added (GSVA), followed by the secondary sector (33.37 per cent) and the primary sector (13 per cent). As in developed economies, if the state’s secondary sector share increases by about 5 per cent, employment prospects will likely improve further, it stated.

Accelerated growth in agriculture and allied sectors was achievable if Tamil Nadu addressed challenges such as groundwater depletion and climate change. Implementing climate-smart practices, mechanisation, and post-harvest value addition could significantly boost income in these sectors, it said.

Tamil Nadu is an industrial powerhouse, contributing 11.90 per cent to India’s manufacturing GDP and leading the nation in the number of factories. With 35.56 lakh Udyam-registered Micro, Small, and Medium Enterprises (MSMEs), Tamil Nadu ranked second nationally in 2023-24.

"Dubbed the 'Detroit of India,' the state houses over 1,500 factories producing automobiles and auto components," it said.

The state ranked first in motor vehicle production, wearing apparel, and leather products and second in textiles, machinery, and electronic products. It also leads the country in exporting engineering goods, electronics, ready-made garments, cotton yarn, handloom products, and leather goods. In 2023-24, 33.31 percent of Tamil Nadu’s total workforce was engaged in industrial activities, with 15.97 percent in manufacturing and 17.2 percent in construction.

From 2019-20 to 2023-24, total credit to Tamil Nadu’s industry through scheduled commercial banks increased from Rs 2.5 lakh crore to Rs 3.01 lakh crore, while Foreign Direct Investment (FDI) rose from Rs 5,909 crore to Rs 20,157 crore.

Among major states, Tamil Nadu consistently ranked among the top three in the Credit-Deposit Ratio (CDR), reflecting its high economic activity. The state’s CDR increased from 109.2 per cent in 2019-20 to 117.7 per cent in 2023-24, compared to India’s rise from 76.5 per cent to 79.6 per cent. Credit to the service sector through scheduled commercial banks grew from Rs 2.86 lakh crore in 2019-20 to Rs 4.46 lakh crore in 2023-24, it said.

Employment generation is crucial for economic growth and social stability. In 2019-20, Tamil Nadu’s Labor Force Participation Rate (LFPR) for individuals aged 15-59 years was 63.3 per cent, compared to the all-India average of 56.9 per cent. By 2023-24, it had risen to 64.6 per cent, surpassing the national average of 64.3 per cent.

Between 2005-06 and 2022-23, Tamil Nadu’s poverty rate (Headcount Ratio) decreased significantly, from 36.54 per cent to just 1.43 per cent, while India’s HCR declined from 55.34 per cent to 11.28 per cent. In 2023-24, Tamil Nadu ranked fourth among major states in terms of average monthly per capita consumption expenditure for both rural and urban areas, consistent with its position as the fourth highest in annual per capita income. PTI JSP ROH

Source: PTI