Braving the COVID pandemic, key sectors in Tamil Nadu looked up in the year 2021, as the new DMK government announced ambitious revival and growth initiatives.
The government also roped in top economists to advise the State on its endeavour. The appointment of the Economic Advisory Council, comprising experts including Nobel laureate Esther Duflo, former Chief Economic Adviser Arvind Subramanian, and former RBI Governor Raghuram Rajan, and the signing of agreements with the industries, helped the State register higher growth than the national average, according to Guidance Tamil Nadu Chief Pooja Kulkarni.
Tamil Nadu attracted over ₹50,000 crore investment proposals this year, even as the government rolled out an ambitious $1 trillion State Gross Domestic Product (SGDP) target by 2030, said Kulkarni. The services, farm and realty sectors had a good year, she added. “Tamil Nadu would focus on key sectors as part of achieving the vision put forth by Chief Minister MK Stalin,” she added.
“In 2021, we have actually grown despite the pandemic. The national GDP last year was 3%, whereas it was 5.5% at the State level. We have been able to keep up the services sector and agriculture sector functioning,” Kulkarni said.
Guidance Tamil Nadu is the nodal agency set up by the Tamil Nadu government for single-window clearances to projects launched by companies that are keen to set up base in the southern state.
“Focus will be on sectors like information technology, data centres, textiles, electric vehicle manufacturing, tapping renewable energy, footwear industries…these are all the focus areas for the Chief Minister’s vision of taking the SGDP to $1 trillion,” Kulkarni said.
She added that the State has been witnessing positive response from industries, with several companies committing investments of ₹54,229 crore by signing MoUs with the government during the investment conclaves. These would also boost job creation, she noted.
“We anticipate that there would be ₹25 lakh-crore investments in Tamil Nadu by 2030,” Kulkarni said, adding that the pipeline includes some big-ticket investments. “Some have already been signed, some are in advanced stages of discussion,” Kulkarni said.
Then Tamil Nadu Governor Banwarilal Purohit, who announced the Council in his maiden speech at the Assembly, had said that based on its recommendations, the government would ensure the benefits of economic growth reach all segments of the society.
Referring to the State government’s move to support data centres set up by information technology companies, Kulkarni said it’s a key infrastructure, and investment commitments of over ₹30,000 crore have been received by Guidance.
“The government also announced a Data Centre Policy, which will make the State a cata centre hub. Another sector which has huge potential is the textile industry. We have a strong presence in the garments sector,” she added.
Electric vehicles drive
Several electric vehicle (EV) companies have entered Tamil Nadu, with the State receiving over ₹20,000 crore investments in this sector, said Kulkarni. Investments in the EV two-wheeler manufacturing include the Greaves Cotton factory in Ranipet, Boom Motors near Coimbatore and Ola Electric factory near Hosur.
Tamil Nadu was also a strong player in the leather sector. “The State is very strong in leather and the growth of leather in the athleisure segment has been strong,” said another official, pointing out that some investments have already been made, in places such as Cheyyar, Tindivanam and Bargur.
The State government has also rolled out sector-specific policies like industrial policy and financial technology policy.
Putting behind a forgettable 2020, when the pandemic and related lockdown severely dented real estate, 2021 proved to be a refreshing change for the sector, as there was a significant drop in the unsold inventory.
Arun MN, founder of property developer CasaGrand, said the sector saw a steady recovery from the COVID pandemic, registering impressive sales and new project launches.
The drastic increase in sales was mainly due to the sudden change in the mind of home buyers, as people started realizing the importance of owning a house during the pandemic and considered it to be the safest investment option, he said.
“Unlike any other year, 2021 witnessed a steady drop in unsold inventories as markets also witnessed an increased interest for secondary home buying,” Arun said.
“The all-time low home loan interest rates, plethora of unique deals offered by the government and developers, attractive property rates and higher household savings are some of the key factors that helped the market move upwards,” he added.
“The RBI decided to keep policy rates unchanged, implying that the low-interest regime on home loans will continue, assisting in the restoration of housing demand,” Arun further said.
Sterling Developers Chairman Ramani Sastri said that although 2021 had its share of challenges, it also paved the way for the real estate sector to adopt disruptive models to ensure business resilience and agility. He expressed hope that 2022 would be a year with continued steady demand for multi-functional homes.
“There will be continued unique project offerings, and home buyers will have ample choices. Given the confidence built in 2021 post the pandemic and the favourable interest rates for home-buyers, one can expect an uptick in sales in the coming year,” Sastri said.
(With inputs from Agencies)