Tamil Nadu's Economic Survey: State eyes over 8% growth amid challenges

Tamil Nadu is projected to grow over 8% in 2024-25, driven by policy reforms, infrastructure development, and economic diversification

Tamil Nadu is set to maintain a growth rate of over 8 per cent in 2024-25, according to the State’s first-ever Economic Survey 2024-25. The report also highlights the State’s economic resilience, showing that Tamil Nadu has consistently achieved growth rates of 8 per cent or more since 2021-22, even as global and national economies have faced fluctuations, reported The Hindu.

 

Global and national economic comparison 

The survey notes that in 2023, the global economy recorded a real growth rate of 3.33 per cent, while India’s economy grew at 7.61 per cent in 2022-23, followed by 9.19 per cent in 2023-24 and an estimated 6.48 per cent in 2024-25. Against this backdrop, Tamil Nadu’s ability to sustain higher growth is attributed to its strong policy framework, infrastructure development, and economic diversification.

 

 

Tamil Nadu’s rising per capita income 

The survey highlights Tamil Nadu’s strong per capita income growth, which has consistently outpaced the national average. In 2022-23, Tamil Nadu’s per capita income stood at Rs 2.78 lakh, which is 1.64 times higher than the national average of Rs 1.69 lakh. This places Tamil Nadu as the fourth-largest state in terms of per capita income.

 

Insights from the Economic Survey 

Prepared by the State Planning Commission in collaboration with the Finance Department and other key departments, the Economic Survey was presented to Chief Minister MK Stalin on March 13, 2025. The report provides a detailed analysis of various economic sectors, including agriculture, industry, and services. It examines inflation trends, employment patterns, and key social development indicators while outlining medium-term growth prospects for 2024-25 and 2025-26. 

 

The survey also highlights policy challenges and suggests remedial measures to address short-term economic hurdles while ensuring long-term growth.

 

State’s growth limited by Union govt policies 

In his foreword to the Economic Survey, Dr J Jeyaranjan, executive vice-chairman of the State Planning Commission, emphasised that Tamil Nadu’s economic trajectory has remained strong despite multiple setbacks, including the Covid-19 pandemic and natural disasters such as cyclones and floods over the past three years. However, he slammed the Union government for its lack of support and for restricting Tamil Nadu’s financial autonomy. 

 

He also pointed out that policies such as the National Eligibility cum Entrance Test (NEET), the National Education Policy (NEP 2020), and fiscal borrowing caps have limited the state’s growth potential by imposing unnecessary constraints.

 

Tamil Nadu’s contribution to national GDP 

Despite these challenges, Tamil Nadu continues to be a key contributor to the national economy. The Economic Survey notes that although Tamil Nadu comprises only 4 per cent of India’s land area and 6 per cent of its population, it contributed 9.21 per cent to the national GDP in 2023-24. The State’s Gross State Domestic Product (GSDP) at current prices reached Rs. 27.22 trillion in 2023-24, achieving a nominal growth rate of 13.71 per cent and a real growth rate of 8.33 per cent.

 

Balanced economic growth across regions 

Unlike other States where economic activity is concentrated around a single metropolitan hub, Tamil Nadu’s development is more evenly spread across multiple urban centers. While many large states rely primarily on one or two major cities for economic expansion—such as Mumbai in Maharashtra or Bengaluru in Karnataka—Tamil Nadu’s model ensures more balanced growth across cities like Coimbatore, Madurai, Tirupur, Tiruchirappalli, and Salem. This economic distribution has helped bridge the urban-rural divide and prevent over-reliance on any single city for growth, the survey shows.

 

Regional economic contributions 

The Economic Survey also provides detailed insights into regional economic contributions. The northern region, which accounts for 31.8 per cent of Tamil Nadu’s population, contributed the highest share of the GSDP at 36.6 per cent. The western region, with 22.8 per cent of the population, generated 29.6 per cent of the State’s GSDP. The southern zone, comprising 20.5 per cent of the population, contributed 18.8 per cent, while the eastern region, home to 25.5 per cent of the state’s population, had the lowest GSDP share at 15.1 per cent.

 

Tamil Nadu’s path to a $1 trillion economy 

After assuming office, Chief Minister MK Stalin set an ambitious goal of making Tamil Nadu a $1 trillion economy by 2030. The Economic Survey outlines that to achieve this milestone, the state will need to maintain an annual growth rate of over 12 per cent, driven by industrial expansion, infrastructure development, and the adoption of digital and technological advancements.

As of 2023-24, Tamil Nadu’s GSDP stands at Rs 27.22 trillion, with a real growth rate of 8.23 per cent. The report emphasizes that meeting the $1 trillion target will require a combination of sustained public and private sector investments, policy measures to enhance the ease of doing business, and inclusive economic strategies that ensure all regions of the state benefit from growth. 

 

The survey also stresses that Tamil Nadu must focus on fostering innovation, strengthening manufacturing, and attracting global investments to achieve its ambitious economic goals.

 

Focus on rural development and workforce 

The Economic Survey further highlights the need for Tamil Nadu to accelerate rural entrepreneurship to ensure more inclusive economic development across all districts. The report suggests that the state should leverage its demographic advantage by investing in youth skill development, promoting high-value manufacturing and services, and encouraging women’s participation in the workforce.

 

The survey calls for targeted efforts to integrate emerging technologies into Tamil Nadu’s industrial and service sectors, ensuring that businesses can compete in a rapidly evolving global economy. Strengthening infrastructure, expanding digital access, and improving education and vocational training programs are identified as key drivers of future growth.