How Tamil Nadu has developed into a major hub and spring field of economic activity

Tamil Nadu is one of the best examples of how creating engines for growth can easily result in what can be called spring fields of economic activity. Some dimensions of the same are sought to be explained in this article.


In the State of Tamil Nadu a lot of growth and development in the economy. Since the markets are highly fragmented, there is always a big cash flow and this gets amplified in real-time. How this gets played out in practice is always very interesting. There are always debates in so many circles as to how this happens. Some of the very obvious steps taken by the Government and by private organizations are examined in some detail in this article. It is obvious that the spring fields of economic activity do not occur through the trickle-down theory but through a balanced approach toward the development of all regions.

We will thus discuss the reasons, namely a) Dispersal of economic wealth b) The creation of enviable infrastructure c) Education as a game-changer d) The stupendous service sector growth and e) Making the most of existing resources.

Dispersal of economic wealth

There are lots of triggers of change in different parts of the State. For example, wwhile the Thanjavur belt of Tamil Nadu is extremely rich in agriculture, Tanjore, the biggest city is also home to three Deemed Universities, while Tiruvarur, too, also has a Central University. Tanjore is very near Tiruchirapalli and is connected to the fourth largest city of Tamil Nadu by hundreds of daily buses. Then there is Kumbakonam, which is the second largest town in that district with a massive temple infrastructure. So the large number of domestic and foreign tourists enjoy the natural surroundings that are totally green, as well as the rich cultural heritage of the temples. Hence, the cash flow is always healthy.

Secondly, Tanjore and Kumbakonam are terrific places for a variety of vegetarian food and the tourists love to feast on such food. Similarly, Tirunelveli, which has some industrial clusters with fairly good employment potential, also has a very rich agricultural base. Today, the neighboring district of Tenkasi has a big unit of Zohocorp, which is one of the biggest IT companies in India. This is a big change and has given a boost to infrastructure creation in that part of the State.

The creation of enviable infrastructure

Four decades of infrastructure development in Tamil Nadu has built the largest road network that connects all the rural areas in most districts. There are many mini-buses that connect the remotest of the villages, and local buses are provided free for women. This latest development, made effective by the current DMK Government some twenty months ago, has made an even greater impact. Women regularly travel to neighboring villages and sell unbranded textiles, cheap aluminum vessels, bangles, fruits, vegetables, flowers and what have you. Many of them work on the farms in the morning, earning around Rs.260 and some food, and in the evening, sell some of these things. Their net income for the day is Rs.400 or even Rs.500. This is a fairly good income in the villages, as they already have their own houses purchased decades ago and rebuilt over the years. There are improvements done when the family income goes up. For example, the husband would be a painter of lorries or some wooden furnaces, full time. He would also earn some Rs.400 per day and hence the disposable income goes up as well. The 20kgs of rice or wheat from the Public Distribution System also adds to the family feeling assured about living a very comfortable life.

The road infrastructure is aided by fairly good Government hospitals in every district. Many of these hospitals have ISO certification for quality processes and systems and also have private sector contributions in terms of beds being maintained by private individuals, in terms of maintenance costs, etc. For all ordinary ailments, where the private doctors would make them poorer by Rs.400, now the money is saved since the govt. hospitals are very effective in treatment.

There are also many shops and establishments always available within a radius of just five kilometers in almost every district. Hence, people are quite happy with the facilities. If there is a district headquarters town, one will see an entire lot of Government departments, quasi-Government departments, even Government schools, and colleges, and the regular salary-earning employees together with the private sector employees contribute to the service sector growth. New hotels and lodges, new bus stations, restaurants, etc also come up. catering to the lower middle class and even to the middle of the middle-class spectrum.

Then there are many support systems that cater to the stupendous growth of the service sector. For example, Chennai is home to at least ten large corporate hospitals, led by the Apollo group, and there is also a world-class eye hospital, namely, Sankara Nethralaya. There is a branch of the famous Aravind Eye hospital as well. These hospitals recruit a massive number of professionals, thanks to the large number of paramedical courses offered by the Sri Ramachandra Hospital, which is now a Deemed University as well. The hospital has the widest range of specialties as well. Direct and indirect employment runs into several hundreds of thousands of people. There is a pan-India demand for such services.

Education as a game-changer

The massive number of courses available in the State has made Tamil Nadu the leader in higher education with an enrolment ratio of over fifty percent, almost double the National average. In fact, there are many real estate developments that have happened only because of the growth of schools and colleges.

Coimbatore is the second largest city in India and this city is also home to over sixty good engineering colleges (and a good number of quality corporate hospitals of the type mentioned earlier). There are diploma polytechnic colleges, Arts and Science Colleges, etc. Salem, with a massive number of educational institutions, is another hub for quality education. Chennai, Tirunelveli, Madurai, and other cities and towns have a growing number of CBSE schools with English as the medium of instruction. VIT Deemed University, with its main campus at Vellore, and the SRM Deemed University, with its main campus at Chennai are ranked the best engineering institutions. SRM offers a range of medical courses and both these Deemed Universities also despatch a big crop of graduates for higher education abroad.

The stupendous service sector growth

The service sector growth has happened due to the presence of entrepreneurs who have simply milked the urban conglomerates. The small towns near the big cities are engines of growth. For example, Tindivanam, Chengelpet, Villupuram, and Maduranthakam near Chennai have experienced a lot of growth in the past two decades. The bus services and the trains that connect these cities also encourage trading activities. For example, the trade-in textiles between the 15th of December and Jan 10th of the next year have to be seen to be believed. The yearly shopping for entire families happens during this period and community feasting during the Pongal festival, between the 13th and 19th of January, every year, is a market that perhaps is the biggest in India. The temples come alive and private sponsorship of food is to be served to anyone coming to pray.

Not just Amazon, but even local players are into online businesses, with game-changers emerging everywhere in the State. Local brands of pickles, jams, cakes, and so on, are doing well. The influence of mass media has opened up new markets. Local television channels have opened up the advertising industry and the culture of fashion shows is spreading so fast in small cities as well.

Making the most of existing resources

There is a good deal of sharing and caring. There are Government hospitals in the district headquarters towns and cities, where subsidized lunch and breakfast are provided. During the pandemic, help from voluntary organizations reached the most remote corners. Caring and sharing enabled people to come out of the menace in record time.


Since the State Government is driving the engines of growth in terms of providing for all the basics, Tamil Nadu is one of the most advanced States in India. In the years to come, the spring fields of economic activity are bound to increase day by day.


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