Global Investor Meet ends on a high, but is TN's $1 trillion economy target possible?

The Global Investors Meet, hosted by the Tamil Nadu government in Chennai on January 7 and 8, has promised over 25 lakh jobs in various sectors, including electric vehicle manufacturing, renewable energy, and cell phone assembling. During the meet, the government also revealed its ambition to make the state a $1 trillion economy by 2030.

While there are doubts about the possibility of achieving 18 percent growth every year to achieve the target of a $1 trillion economy, firms that clinched deals are upbeat about their proposals.

In his concluding speech, Tamil Nadu Chief Minister MK Stalin said investment deals worth ₹6.64 lakh crore were signed in the two-day event. He said the meet would generate 26.90 lakh jobs. Apart from business giants, the meet also encouraged several start-up firms in areas like artificial intelligence and rocket launching services firms to meet their potential funding firms. The meet received over 400 international delegates from 50 countries. The government also launched its Semi-conductor and Advanced Electronics Policy at the meet.

Key deals, job assurances

Among key pacts, Vietnamese electric vehicle maker VinFast proposed to set up a plant at an investment of ₹16,000 crore in Thoothukudi while Tata Electronics assured to invest ₹12,082 crore in a mobile phone assembly unit in Krishnagiri, which in turn will churn out 40,000 direct jobs. Besides this, the Singapore government promised to invest ₹31, 000 crore in the state, including establishing the first net zero industrial park in collaboration with State Industries Promotion Corporation of Tamil Nadu (SIPCOT).

Hyundai Group declared that it would invest over ₹6,000 crore to set up electric vehicle and battery manufacturing units in Kanchipuram. It also promised to provide close to 6,180 jobs. Unsoo Kim, managing director and chief executive officer, Hyundai Motor India Ltd. said the company signed a memorandum of understanding (MoU) with the Tamil Nadu government as part of a long-term commitment to the state government. He also said that the company has a plan in motion to come up with a Hydrogen Resource Centre in association with the IIT-Madras.

‘TN has highest concentration of SEZs’

During the course of the meet, several sessions and meetings were organised for investors and entrepreneurs to get to know each other along with government representatives. During a special session on special economic zones, Alex Paul Menon, Development Commissioner, MEPZ (Madras Export Processing Zone), said Tamil Nadu has the highest concentration of Special Economic Zones (SEZs) in the country, with 54 of them in operation, accounting for one-third of the state’s exports.

He also said that the time taken to give clearances at MEPZ (Madras Export Processing Zone) SEZs has been 11 average working days in the past year. If designed and implemented carefully, SEZs can attract global value chains in the region, he said.

History of past investors' meets

The Tamil Nadu government had earlier hosted Global Investors Meets in 2015 and 2019 during the AIADMK regime. According to media reports, in 2015 while the J Jayalalithaa-led AIADMK government had promised an investment of ₹2.42 lakh crore, only investment worth ₹75, 550 crore could be materialised. In 2019, the Edappadi K Palaniswami-led AIADMK government has assured that the second edition of the Global Investors Meet had attracted an investment of ₹2.68 lakh crore. However, only business deals worth ₹1.01 lakh have been signed so far.

While the third edition of the investors meet is the first to be organised by the DMK-led government, the Stalin government’s goal of achieving a $1 trillion economy by 2030 is being debated as the last two editions did not match up to the goal.

Is dream of $1 trillion economy achievable?

Speaking about the Tamil Nadu government’s ambition to achieve a $1 trillion economy target, former RBI governor Raghuram Rajan and member of Tamil Nadu Economic Advisory Council said, setting an ambitious target is important and the government should focus on creating an environment for industry.

‘’We have to make it possible. I think we should be as competitive as we can. It is important to focus on creating an environment for industry,” he said while emphasising that manufacturing sectors should be given equal treatment, and the service sector should not be given a step-motherly treatment.

Former chief economic advisor, Arvind Subramanian, said that to reach the $1 trillion economy target, Tamil Nadu has to grow at 18 percent for the next seven to eight years. He also said that even China had managed to grow only between 10-12 per cent over the 40 years. But he ended with a positive note saying, ‘’If there’s any state in India that could do it, it is probably Tamil Nadu. Also, if there is any point of time in history where it could be done, it is now.’’