Context:
- Tamil Nadu has emerged as the fastest-growing major State economy in India in 2024–25, reflecting a broad-based and inclusive development model.
- The State’s performance is driven by manufacturing-led growth, strong exports, welfare-oriented governance, and human development outcomes, as highlighted in recent economic data.
Key Highlights:
Economic Growth & Macro Indicators
- Gross State Domestic Product (GSDP) grew by 16% in nominal terms in 2024–25, reaching ₹31.19 lakh crore.
- Real economic growth rate stood at 11.2%, the highest among major States.
- Projected fiscal deficit remains stable at 3% of GSDP (2025–26 BE) despite reduced central transfers.
Manufacturing & Industrial Strength
- Manufacturing GSDP increased by ₹1.46 lakh crore over four years.
- Tamil Nadu hosts the largest number of factories and factory workers in India.
- All districts are covered under one or more industrial corridor projects, ensuring regional industrial integration.
Exports & Investment
- Merchandise exports reached $52.07 billion (2024–25).
- Leading sectors:
- Electronics
- Textiles
- Leather
- FDI inflows amounted to $3.681 billion in the last year, indicating strong investor confidence.
Social Development & Welfare Outcomes
- Infant Mortality Rate (IMR): 12 per 1,000 live births (among the lowest in India).
- Multidimensional Poverty Rate: 1.43%, reflecting inclusive growth.
- Gross Enrolment Ratio (GER) in higher education: 47%, the highest in India.
- Welfare schemes focus on:
- Education
- Public health
- Women’s empowerment
Relevant Prelims Points:
- Issue: State-led inclusive and diversified economic growth.
- Causes:
- Strong manufacturing base
- Skilled workforce
- Robust infrastructure
- Government Initiatives:
- Industrial corridor projects
- Welfare schemes in health and education
- Benefits:
- High growth with low poverty
- Improved human development indicators
- Challenges:
- Dependence on global export demand
- Managing fiscal pressures amid reduced central transfers
- Impact:
- Tamil Nadu as a model State for balanced development
Relevant Mains Points:
- Key Definitions & Concepts:
- GSDP: Value of goods and services produced within a State.
- FDI: Cross-border investment creating long-term interest.
- GER: Measure of access to education.
- Static + Current Linkages:
- Manufacturing-led growth aligns with Make in India objectives.
- Welfare outcomes support human capital theory.
- Governance Perspective:
- Decentralised industrial spread reduces regional inequality.
- Welfare spending complements economic growth.
- Way Forward:
- Sustain manufacturing competitiveness through innovation.
- Strengthen MSME integration with global value chains.
- Balance fiscal prudence with social sector investments.
- Enhance climate-resilient and green industrial practices.
UPSC Relevance (GS-wise):
- GS Paper 3: Economy (Growth, Manufacturing, Exports, Investment).
- GS Paper 2: Governance (Welfare delivery, Fiscal management).
- Prelims: GSDP, FDI, GER, State economic indicators.