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Tamil Nadu’s Decentralised Industrialisation Model

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Context

  • Tamil Nadu is India’s No.1 state in terms of economic complexity, measured by the diversity of its gross
    domestic product (GDP) and employment profile.

About

  • About 45.3% of TN’s farm Gross Value Added (GVA) comes from the livestock subsector, the highest for
    any state and way above the 30.2% all-India average.
  • TN is home to India’s largest private dairy company (Hatsun Agro Product), broiler enterprise (Suguna
    Foods), egg processor (SKM Group) and also “egg capital” (Namakkal).

Features of the TN’s Industrialisation Model

  • Development of Clusters: TN’s economic transformation has been brought about not by so-called Big
    Capital as much as medium-scale businesses with turnover range from Rs 100 crore to Rs 5,000 crore.
  • • Its industrialisation has also been more spread out and decentralised, via the development of clusters. Many
    cluster towns are hubs for multiple industries.
  • • Employment Generation: Most of these clusters have come up in small urban/peri-urban centres, providing
    employment to people from surrounding villages who may otherwise have migrated to big cities for work.
  • • They have, moreover, created diversification options outside of agriculture, reducing the proportion of TN’s
    workforce dependent on farming.
  • • Entrepreneurship: TN’s early industrialists were mainly Nattukottai Chettiars and Brahmins.
    • The disruptions from World War II and the Burmese nationalist movement led many to redirect their
    investments back home.
    • The remarkable thing about TN’s entrepreneurial culture is its percolation among diverse communities and
    in a range of industries.
    • The drivers of TN’s more recent decentralised industrialisation have been entrepreneurs from more ordinary
    peasant stock and provincial mercantile castes.
  • Development of Clusters: TN’s economic transformation has been brought about not by so-called Big Capital as much by medium-scale businesses with turnover ranging from Rs 100 crore to Rs 5,000 crore.
  • Its industrialization has also been more spread out and decentralized, via the development of clusters. Many cluster towns are hubs for multiple industries.
  • Employment Generation: Most of these clusters have come up in small urban/peri-urban centers, employing people from surrounding villages who may otherwise have migrated to big cities for work.
  • They have, moreover, created diversification options outside of agriculture, reducing the proportion of TN’s workforce dependent on farming.
  • Entrepreneurship: TN’s early industrialists were mainly Nattukottai Chettiars and Brahmins.
  • The disruptions from World War II and the Burmese nationalist movement led many to redirect their investments back home.
  • The remarkable thing about TN’s entrepreneurial culture is its percolation among diverse communities and in a range of industries.
  • The drivers of TN’s more recent decentralized industrialization have been entrepreneurs from more ordinary peasant stock and provincial mercantile castes.

Conclusion

  • The entrepreneurship from below combined with its high social progress indices from public health and education investments explains Tamil Nadu’s relative success in achieving industrializationa and diversification beyond agriculture.