For a State that has long enjoyed a reputation for being an attractive investment destination, the last few years have been sub par for Tamil Nadu. Even as Gujarat seemed to overpower virtually every other State in the mind space of investors, Tamil Nadu has had to contend with one piece of bad news after another. From the closing down of the high-profile Nokia and Foxconn factories to the seemingly never-ending infrastructure and power woes, there has been little going for it. It hardly helped that there were larger issues affecting investment in India, including concerns about the aggressive taxman, infrastructure woes and the cost of finance. Of late, States such as Madhya Pradesh, Chhattisgarh and West Bengal have taken a cue from Gujarat in staging their own investor summits, stirring up a bit of competition. Also, those such as Karnataka, Telangana and Andhra Pradesh came across as being more proactive in seeking hi-tech industries. Tamil Nadu has always underplayed itself. It is in this context that one has to see Tamil Nadu’s successful staging of its first-ever Global Investors Meet, an event that was postponed twice and at one point even seemed a doubtful starter. The icing on the cake is that investors have pledged Rs. 2.4 lakh crore, more than double of what the initial target seemed to be. One of the important implications of investment is in job-creation. Tamil Nadu, with its huge talent pool of engineers and students with technical skills, needs those jobs.
But the challenge starts now. There is data to show how little of the investment promises actually translate to investment on the ground, not just in Tamil Nadu but across India. Even those that materialise eventually do so over a period of time. Typically, clearances and the process of land acquisition take time. The State has made some progress in dealing with its grave power crisis but isn’t as yet completely out of the woods. For the promises to become reality, power reforms need to continue. Also, its plan, under the Vision 2023 document, to invest $250 billion toward infrastructure needs to come good. What also matters is the health of the economy, both global and domestic. The global economy looks fragile, and in an increasingly inter-linked world could affect domestic investment. There are many things going for the State, though, not least the traditional advantages it has had – skilled manpower, peaceful industrial relations and a strong manufacturing ecosystem. Something else that could woo investors is its amended land acquisition Act, which experts are already talking about as a model for other States. There’s a lot that needs to be done to make promises a reality but, importantly, a start has been made. The pitch is good. Will the end result also be?
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