What's Happening?
Tamil Nadu's finance minister, Thangam Thennarasu, announced that the state's manufacturing sector has been a major contributor to its economic growth, achieving a 16% increase in the gross state domestic product (GSDP) for the fiscal year 2024-25. The state's GSDP reached
Rs 31.19 lakh crore, with the economy growing to Rs 26.88 lakh crore in 2023-24. The manufacturing sector's performance has outpaced other industrialized regions, including Maharashtra, with over 40,000 factories employing approximately 27.7 lakh people. The construction and service sectors also contributed to this growth, with the construction sector expanding by 15.9% in 2023-24 and 11% in 2024-25, while the services sector accounted for 53% of the state's growth. The export sector, particularly in electronics, saw a significant surge, with exports rising from $1.86 billion in 2021-22 to $14.65 billion in 2024-25.
Why It's Important?
The robust growth of Tamil Nadu's manufacturing sector highlights the state's strategic economic planning and its potential to become a leading industrial hub in India. This growth not only strengthens the state's economy but also provides substantial employment opportunities, contributing to overall economic stability. The surge in electronics exports positions Tamil Nadu as a key player in the global electronics market, potentially attracting further foreign investment. The state's fiscal discipline, with a fiscal deficit kept within 3% and a declining debt-to-GSDP ratio, underscores its commitment to sustainable economic policies. This economic momentum could serve as a model for other states aiming to boost their industrial sectors.
