Tamil Nadu accounts for 15% of all factories in India, says RBI report

Tamil Nadu has the maximum number of factories in the country, said a report released by the Reserve Bank of India (RBI) earlier this month. According to the report, more than 15 per cent of all factories in the country are located in the southern state. 

As of 2020, Tamil Nadu had 38,837 factories, 10,000 more than second-placed Gujarat (28,479). This, despite Gujarat’s factory count rising by 82 per cent in the last decade against Tamil Nadu’s 45 per cent.

While Tamil Nadu accounts for 15.7 per cent of all factories in the country, Gujarat’s share is about 11.5 per cent. Maharashtra is third on the list with 25,610 factories (10.3 per cent share) while Andhra Pradesh with 19,924 factories (6.8 per cent) comes fourth, and Uttar Pradesh’s 19,184 factories (6.5 per cent) complete the top five.

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While India has signalled its intent to become a $5-trillion economy by 2030, Tamil Nadu wants to achieve one-fifth of that target on its own. It is reported to be setting its sights on investments worth ₹45 lakh-crore in the next eight years to cement its position as India’s manufacturing hub.

Diversifying manufacturing sector

Of late, Tamil Nadu has been looking outside its traditional trump card of being the nation’s auto manufacturing hub as a means of attracting future investments. The electronics manufacturing sector now has a strong presence in the state, thanks to investments by Pegatron, Foxconn and Tata Electronics — the Tata firm recently made a ₹4,700-crore investment there.

Today, Tamil Nadu’s diversified manufacturing sector comprises automobiles, components, electronics, textiles, chemicals, leather and non-leather manufacturing. Manufacturing accounts for a third of Tamil Nadu’s projected GDP of $320.3 billion by FY23. The sector now hopes to account for 40 per cent of the state’s projected trillion-dollar economy by 2030, a senior Tamil Nadu government official told The Federal.

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To bring in these investments, the state is rolling out the red carpet and offering incentives like extension of single window clearances to MSMEs, 24×7 power and capital subsidies.

Number of workers

The maximum number of factories in the country also means that Tamil Nadu has the maximum number of workers employed in industries. Per RBI data, Tamil Nadu has a total of 22.09 lakh workers employed in various industries. Maharashtra follows with a total of 14.54 lakh workers.

“Tamil Nadu factories are mostly MSMEs and therefore there are more workers there. But in Maharashtra, the factories are mostly machine-based and therefore they employ fewer workers,” said the official.