CHENNAI: Tamil Nadu’s goal to become a $1 trillion economy is ambitious. But if any Indian state can achieve it, it has to be Tamil Nadu, said two members of the state’s economic advisory council.
“Tamil Nadu’s $1 trillion goal is ambitious. But if there is a good time to reach that goal, it is now,” said former RBI governor Raghuram Rajan, participating in a panel discussion – The Big Bets for TN’s $1 Trillion Economy – organized as part of the two-day Global Investor Meet here on Sunday. “Tamil Nadu can tremendously benefit from that goal,” Rajan said.
If Tamil Nadu has to become a $1 trillion economy by 2030, it has to grow at 18% per annum for the next seven years. “It has never happened in history and is a little ambitious. Even China had grown at around 10-12% over 40 years. But if any state can do it is Tamil Nadu,” said Arvind Subramanian, former chief economic adviser of India.
According to him, India skipped manufacturing to opt for services for growth. Post China, a huge opportunity is opening up in manufacturing. But on a global scale in manufacturing, if China is 40%, India is 4%. Manufacturing scale has been an issue. “But of late, we are seeing factories employing 20,000-30,000 people coming up in Tamil Nadu. Even if we scale up our manufacturing capabilities from 4% to 12-15%, that itself will be a huge growth,” Subramanian said.
Pointing out that services is not a stepchild, Raghuram Rajan said tourism offers a huge opportunity for growth immediately. “In manufacturing, Tamil Nadu should focus on the higher end of the spectrum, given the background of highly educated youth and government support. Companies like Agnikul are 3D printing rockets at IIT Madras. Qualcomm’s decision to establish a design centre in Chennai indicates the trend of combining manufacturing and design,” Rajan said.
“In manufacturing, we are not only competing with China. Tamil Nadu is competing with Uttar Pradesh and Maharashtra. Hence, focus should be on the higher end of manufacturing,” said Rajan.
