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Mahesh

16/04/24 10:56 AM IST

Tamil Nadu’s decentralised industrialisation model

In News
  • 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.
Cluster-based industrialisation
  • TN has just a handful of large business houses with annual revenues in excess of Rs 15,000 crore: TVS, Murugappa, MRF, Amalgamations and Apollo Hospitals.
  • Even they are not in the league of Tata, Reliance, Aditya Birla, Adani, Mahindra, JSW, Vedanta, Bharti, Infosys, HCL or Wipro, as far as turnover goes.
  • 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 (some, like Hatsun and Suguna, have graduated to the next Rs 5,000-10,000 crore level).
  • Its industrialisation has also been more spread out and decentralised, via the development of clusters.
  • Some of the clusters – agglomerations of firms specialising in particular industries – are well known: Tirupur for cotton knitwear (the units there clocked exports of Rs 34,350 crore and Rs 27,000 crore of domestic sales in 2022-23); Coimbatore for spinning mills and engineering goods (from castings, textile machinery and auto components to pumpsets and wet grinders); Sivakasi for safety matches, fire crackers and printing; Salem, Erode, Karur and Somanur for powerlooms and home textiles; and Vaniyambadi, Ambur and Ranipet for leather.
Popular towns
  • Many cluster towns are hubs for multiple industries. Thus, Karur has powerlooms, bus body builders and even makers of mosquito and fishing nets (one of them, V.K.A. Polymers, is a major exporter of insecticide-treated bed nets).
  • Dindigul has spinning mills and leather tanneries.
  • Namakkal is as famous for layer poultry farms as its large lorry fleet/bulk cargo logistics operators and tapioca-based sago (sabudana) factories.
  • Salem has powerlooms and tapioca starch-cum-sago producers, while Erode is a textile and “turmeric city”.
  • Chatrapatti, in Virudhunagar district’s Rajapalayam taluka, is “bandage city” not for nothing: It is a manufacturing centre for bandages, gauze pads/rolls/swabs and other surgical cotton products and woven dressings. Tiruchengode is India’s “borewell rigs capital”.
  • The borewell drilling services contractors of this town near Namakkal take their truck-mounted rigs all over the country to dig up to 1,400 feet.
  • Dhalavaipuram, hardly 10 km from Rajapalayam, specialises in production of nighties and ladies innerwear, just as Natham, next to Dindigul, does in low-priced men’s formal shirts.
  • Tirupur’s knitwear industry alone today employs some 800,000 people, including migrants from Uttar Pradesh, Bihar, Jharkhand, Odisha, Assam and other states. Take K.P.R. Mill Ltd.
  • This company, with Rs 4,740 crore sales in 2022-23, has 21,819 permanent employees – over 84% women – at its garmenting, knitting, spinning and processing facilities in Tirupur and nearby areas of Coimbatore and Erode districts.
Entrepreneuership in TN
  • A traditional banking-cum-trading community, the Chettiars had extensive operations in Southeast Asia and Sri Lanka.
  • The disruptions from World War II and the Burmese nationalist movement led many to redirect their investments back home.
  • Prominent among them were Annamalai Chettiar (the M.A. Chidambaram and Chettinad groups descended from him), A.M.M.
  • Murugappa Chettiar (Murugappa Group), Karumuttu Thiagaraja Chettiar (textile magnate) and Alagappa Chettiar (textiles, insurance, hotels and education).
  • The big Tamil Brahmin-owned houses included TVS, TTK, Amalgamations, Seshasayee, Rane, India Cements, Sanmar, Enfield India, Standard Motors and Shriram.
  • A more recent name is the business software solutions company Zoho Corporation of Sridhar Vembu.
  • Coimbatore’s spinning mills, foundries, machining and pumps & valves, textile equipment and compressor making units were mostly started by Kammavar Naidus.
  • The promoters of Suguna Foods, CRI Pumps, Elgi Equipment and Lakshmi Machine Works, too, are from this community.
  • Sivasaki’s fireworks, match and printing industries have been built largely by Nadars. But this belt in southern TN – also covering Virudhunagar, Srivilliputhur, Watrap and Rajapalayam – has produced entrepreneurs from other communities as well: Raju (Ramco Group and Adyar Ananda Bhavan) and Udayar (Pothys).
  • Many from here have also gone on to create successful product brands: Hatsun (‘Arun’ ice-cream and ‘Arokya’ milk), V.V.V. & Sons (‘Idhayam’ sesame oil) and Kaleesuwari Refinery (‘Gold Winner’ sunflower oil).
Way forward
  • The above “entrepreneurship from below” – combined with its high social progress indices from public health and education investments – probably explains TN’s relative success in achieving industrialisation and diversification beyond agriculture.
Source- Indian Express

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