Once a hotspot, Tamil Nadu near bottom among southern states on investments

In what is being seen as a corroboration of the general sentiment that Tamil Nadu is losing out to other states in attracting investments, data shows that there has been a downtrend in the value of proposals in the state the past few years. The exception was the year 2015, when the State held a Global Investors' Meet (GIM).

Tamil Nadu was at the bottom in terms of value of investment intentions, among the four major industrial states in the south during 2017, according to the data available from Union Ministry of Commerce and Industry.

For the year ended 2017, investment intentions in Tamil Nadu stood at Rs 31.3 billion from 62 proposals, accounting for around 0.79 per cent of the total investment intentions of Rs 3,953 billion in the country. This is a decline from Rs 61.72 billion contained in 106 proposals (around 1.46 per cent of the Rs 4,149.9 billion investment intentions recorded in the nation in 2016).

In 2013, investment intentions filed for the State stood at Rs 273.8 billion in 168 proposals (5.17 per cent), which declined to Rs 145.98 billion in 96 proposals (3.60 per cent) in 2014. In 2015, the investment proposals went up to Rs 198.11 billion in 107 proposals (6.37 per cent), owing possibly to the GIM, which saw the government signing a slew of agreements to secure investments worth Rs 2,420 billion for a period of up to seven years.

Going by these figures, the State has fallen behind Karnataka, Andhra Pradesh and even Telangana in the South, apart from Gujarat and Maharashtra in the West. Karnataka has had investment intentions worth Rs 1521.18 billion (38.48 per cent), Andhra Pradesh to the tune of around Rs 295.37 billion (7.47 per cent), Telengana to the tune of Rs 162.09 billion (4.14 per cent), Gujarat at Rs 790.68 billion (20 per cent) and Maharashtra at Rs 485.81 billion (12.29 per cent) during the period.

For the three months ended March 2018, the State has seen 20 investment proposals worth Rs 13.06 billion, according to the DIPP data.

In the past, Tamil Nadu was among the top industry friendly States, along with Gujarat and Maharashtra. As a matter of fact, RBI's Handbook of Statistics on Indian States 2016-17, shows that it topped the list of states, with 16 per cent of the total number of factories in India in fiscal 2015.

The state seems to be losing potential investors, with even industries that had invested in it earlier giving it a wide berth now. One of the most notable examples is that of Kia Motors, the Group company of Korean automajor Hyundai Motors, which opted Andhra Pradesh instead of Chennai for its manufacturing facility. The State government defended itself on this, stating that Hyundai has a group policy of not allowing its companies to set up manufacturing facilities in regions another one from the group already has its plant.

Kia, however, was just one example. Several other companies have preferred Andhra Pradesh to Tamil Nadu in the recent past.

The Tamil Nadu government says it has introduced a single-window portal and facilitation norms for ease of doing business. The State Industries Minister M C Sampath points out that it has roped in tyre manufacturer CEAT (Rs 50 billion investment), PSA Group, maker of car brand Peugeot (Rs 20 billion) and furniture firm IKEA (Rs 12 billion).

The State has seen the highest value of investment proposals in the last four years in 2017-18, with a potential investment pipeline of Rs 190.33 billion as against Rs 82.88 billion proposals in 2016-17, according to an earlier research by real estate consultant JLL India. It has had over 46 investment proposals with cumulative investments of about Rs 373.8 billion since 2015, it said.

The latest agitation against Vedanta's Sterlite Copper plant in Thoothukudi, which has led to police firing and death of 13 people in May, and similar agitations taking place occasionally in various parts of the State, would dampen the State's image as an industry-friendly investment destination for companies, said industry experts recently.

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